2026 07 31 Earnings LIN Q2 Fy2026

Summary

Linde beat (record Q2 sales $9.3B, +9% YoY; EPS $4.50, +10% YoY) but shares fell ~5.2% on margin disappointment. The causal chain the wiki cares about: electronics is the fastest-growing end market (+18%), driven by "hardware associated with AI," and Linde added $1B of electronics backlog wins to support US advanced-node fab expansion → record $8.1B sale-of-gas backlog. This is picks-and-shovels exposure to the AI-fab buildout (industrial gases gate advanced-node fabs). The margin miss (op margin ex-passthrough −30bp; reported 29.5%, −60bp) is Lincare/US-homecare drag + equipment mix + helium dislocation tied to Middle East hydrocarbon-dependent countries scaling back industrial activity — a demand-side echo of the same oil-supply shock hitting XOM/CVX.

Transcript

(Key speaker-attributed excerpts from the Q2 FY2026 call, per the Investing.com transcript. Verbatim quotes preserved; see source URL for the full transcript.)

Prepared remarks — electronics & AI hardware

Sanjiv Lamba (CEO): "electronics is the fastest-growing end market, with the combination of project startups and higher demand tied to hardware associated with AI."

Sanjiv Lamba: "we added $1 billion of new electronics wins to the backlog to support the expansion of advanced node fabs invest in U.S."

Matt White (CFO): "Electronics was the fastest-growing end market, rising 18%."

Prepared remarks — backlog & guidance

Sanjiv Lamba: "we achieved record sales and EPS levels, with both growing at near double-digit % while increasing the backlog by $1 billion to a record $8.1 billion."

Sanjiv Lamba: "we're expecting to start up more than 20 projects that add up to approximately $1.3 billion in investments."

Sanjiv Lamba: "I expect our sale of gas backlog to finish the year with an eight handle, underscoring continued strength."

Guidance & figures

• Backlog (sale of gas): $8.1B record (+$1B QoQ); expected to finish 2026 with an "eight handle."
• Q3 2026 EPS guidance: $4.45–$4.55 (6–8% YoY). FY2026 EPS: $17.70–$17.90 (8–9% growth).
• H2 2026: 20+ project startups, ~$1.3B investment.
• Price +2%, broad-based, tracking local inflation. Long-term EPS algorithm 8–12%.

Admitted risks / margin headwinds

Sanjiv Lamba: "we are not satisfied with our margin performance for this quarter." "Operating margins, excluding cost pass-through, declined approximately 30 basis points year-over-year."

Matt White (Lincare): Lincare "headwind was larger than earlier estimates"; company "evaluating strategic options, including a possible partial or full divestiture."

Sanjiv Lamba (helium / Middle East): "dislocation costs related to helium… overall recovery probably doesn't quite show through in the margins just yet." "countries highly dependent on hydrocarbons coming out of the Middle East have had to scale back industrial activity."

Analyst Q&A

Laurent Favre (BNP Paribas) — on the Lincare drag magnitude: Sanjiv Lamba: "the Americas business, ex the U.S. home care or Lincare business would be up 20 basis points on margin… actions are aggressively underway."

Jeff Zekauskas (JP Morgan) — on Lincare penalty size: Matt White: "the number's a little higher than what you have… probably 30% higher than that number" (vs. analyst's ~$30M/qtr, ~$100M/yr estimate).

Duffy Fischer (Goldman Sachs) — on helium/Middle East normalization: Sanjiv Lamba: "I don't think you will see normalization this year… it'll… probably take us into the early part of next year."