(RTTNews) - Welding products manufacturer Lincoln Electric Holdings Inc. (LECO: News ) Friday reported a sharp decline in net income for the third quarter, reflecting equity losses in affiliates as well as a more than 30% decline in revenues. On an adjusted basis, earnings per share surpassed analysts' estimates. Lincoln Electric shares are currently trading up more than 13% on the Nasdaq.

Net income for the quarter declined 81.6% to $12.76 million or $0.30 per share from $69.21 million or $1.60 per share last year.

Latest quarter results included rationalization charges of $7.14 million related primarily to a facility closure in Europe and the consolidation of certain manufacturing operations in the Europe and Other countries segments, and a loss of $7.94 million on the acquisition of Jinzhou Jin Tai Welding and Metal Co., Ltd., included in equity loss in affiliates.

Equity losses in affiliates for the quarter was $8.69 million, whereas last year the company had $3.74 million of equity earnings in affiliates.

Adjusted net income, which excludes special items, was $27.04 million or $0.63 per share. On an average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.41 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales decreased 30.2% to $441.80 million from $632.89 million last year. Analysts estimated revenues of $406.78 million.

Region-wise, sales from North America were $256.72 million, lower than $398.22 million last year, and sales from Europe plunged to $93.97 million from $149.01 million in the previous year. Sales from other countries were $113.69 million, down from $123.55 million a year ago.
Operating income for the quarter plummeted to $33.21 million from $89.78 million last year. Excluding special items, operating income in the quarter was $40.4 million or 9.1% of sales.

Effective tax rate for quarter was 47.4%, up from 25.5% last year, due primarily to losses at certain non-U.S. entities, including the loss on the Jinzhou Jin transaction, for which no tax benefit has been provided.

During the third quarter, Lincoln Electric completed the acquisition of Jinzhou Jin, and it expects the transaction to be accretive to earnings by about $0.08 to $0.12 per share over the next twelve months.

For the nine-month period, net income were $24.2 million or $0.57 per share, much lower than $192.82 million or $4.47 per share in the comparable period. Excluding special items, net income were $45.4 million or $1.07 per share. Year-to-date, sales were dropped 35.1% to $1.27 billion from $1.95 billion a year ago.

To receive FREE breaking news email alerts for Lincoln Electric and others in your portfolio

 1   2   Next Page