Linamar (TSE:LNR) reported record second-quarter sales of CAD 3.1 billion and normalized net earnings of CAD 183 million, as strong performance in its mobility business and access-equipment operations offset weak agricultural markets and tariff-related pressure in its industrial segment.
Normalized earnings rose 8.7% from a year earlier, while normalized earnings per share increased 9.6% to CAD 3.08. The company generated CAD 236.5 million in free cash flow during the quarter and nearly CAD 500 million year to date.
Mobility segment posts record earnings
Mobility sales rose CAD 400.8 million, or 20.5%, year over year to CAD 2.4 billion. CFO Dale Schneider said the increase was driven primarily by recent acquisitions, higher volumes on launching and mature programs, and favorable foreign-exchange movements. Those gains were partly offset by lower volumes on certain ending programs, lower volumes on some key programs and reduced electric-vehicle volumes.
Normalized mobility operating earnings climbed 28.6% to CAD 194 million. Schneider attributed the increase to stronger program volumes, acquisitions and operational efficiencies.
CEO and President Jim Jarrell said Linamar’s acquisitions of Aludyne North America, Lightstick and, beginning in the second quarter, Winkelmann Group’s Remscheid and Penzberg facilities supported sales growth and customer gains. The company reported global trailing 12-month sales value, or TPV, growth of 20% to CAD 977.2 million, including a 25% increase in North America.
Linamar recorded nearly CAD 800 million in new business wins across its mobility and industrial businesses during the quarter. Jarrell said the company’s expansion into structural and chassis components has increased request-for-quote activity and broadened its propulsion-agnostic product portfolio.
Management expects double-digit growth in third-quarter mobility sales and normalized earnings, supported by launches, acquisitions and operational improvements. Mobility margins are expected to remain within the company’s normal range and be relatively flat compared with the third quarter of 2025.
Industrial results pressured by tariffs and agricultural weakness
Industrial sales increased 13.8% to CAD 783.5 million, led by strong access-equipment demand. However, normalized industrial operating earnings declined 23.8% to CAD 78.7 million, reflecting lower agricultural sales and the effect of amended Section 232 tariffs on certain products.
Hasenfratz said more than 90% of Linamar’s sales are not affected by tariffs and that the tariffs do not affect the company’s automotive operations. She said the revised Section 232 framework, which took effect in April, has created a larger impact on selected industrial products because of changes in how tariffs are calculated.
Management said the second quarter is seasonally the strongest quarter for Linamar’s industrial businesses and therefore is expected to represent the peak quarterly dollar impact from tariffs. The company expects tariff pressure to be less acute in the following two quarters and is pursuing mitigation actions, including product classification reviews, supply-chain adjustments, distribution optimization, supplier pricing actions and commercial measures.
Linamar expects industrial sales to grow in the third quarter, but forecasts a double-digit decline in normalized operating earnings. Industrial margins are expected to remain below the company’s typical 14% to 18% range, as access-equipment growth only partly offsets agricultural weakness and tariff costs.
Skyjack demand strengthens as agriculture remains soft
Jarrell said Skyjack delivered an “exceptional” quarter, with volumes up 46% year over year and 53% year to date. Growth was broad-based across major regions and product categories, he said, while the industry outlook improved from expectations for a declining market to projected growth of nearly 14% in 2026.
The company cited demand from data-center construction, infrastructure investment and rental-fleet expansion. Jarrell said Skyjack’s backlog and order intake were each approximately double their levels a year earlier, while utilization rates at rental companies were increasing and canceled orders had declined.
Skyjack launched the SJ6940 RTE compact rough-terrain electric scissor lift during the quarter. Its LanyardGO product also received a Best New Product Award at the HIRE26 event in Australia.
In agriculture, Linamar said market conditions remained challenging, with North American industry demand expected to decline about 15% for the year. Europe and other international markets are expected to be flat to marginally lower. Still, management said MacDon gained global wind-rower share, Salford expanded its tillage position and Bourgault gained share in the U.S. air-seeder market.
Jarrell said the agricultural downturn is moderating but has lasted longer than expected, as farmer sentiment remains cautious amid high input costs, inventory levels and uncertainty. Hasenfratz said some areas of the company’s agricultural business are growing from last year and that she expects 2027 to be a better year.
Cash flow, balance sheet and outlook
Linamar ended the quarter with CAD 1.3 billion in cash, CAD 2 billion of liquidity and a net-debt-to-EBITDA ratio of 0.52 times, down from 1.02 times a year earlier. The company had CAD 725.2 million available under its credit facilities.
Since November 2024, Linamar has returned CAD 192 million to shareholders through the repurchase and cancellation of approximately 2.8 million shares. Under its current buyback program, it has repurchased more than 1 million shares for more than CAD 92 million.
For the full year, Linamar maintained its prior outlook for double-digit sales growth and growth in normalized EPS. It expects a modest reduction in normalized net margins, primarily due to the amended Section 232 tariffs, while forecasting higher capital expenditures, low leverage and strongly positive free cash flow.
Management also said it is pursuing growth opportunities outside its traditional markets. Jarrell said Linamar signed a memorandum of understanding with a large international defense prime and letters of intent to manufacture collaborative robots and humanoid robots in North America. He said discussions remain in early stages and did not provide a timetable for potential revenue from those efforts.
About Linamar (TSE:LNR)
Linamar Corp is a diversified global manufacturing company of highly engineered products. The Company’s Industrial segment operates the Skyjack and MacDon brands, It manufactures products for the Aerial Work Platform and Agricultural industries, respectively. The Mobility segment features vertically integrated operations to combine expertise in light metal casting, forging, machining and assembly of components and systems for electric and traditional vehicle applications. In addition, McLaren Engineering and eLIN Product Solutions Group provide design, development, and testing services for the Mobility segment.
