Linamar (TSE:LNR) Posts Quarterly Earnings Results

Linamar (TSE:LNR) issued its earnings results on Wednesday. The company reported C$2.59 earnings per share for the quarter, FiscalAI reports. The business had revenue of C$3.08 billion for the quarter. Linamar had a return on equity of 10.96% and a net margin of 6.15%.

Here are the key takeaways from Linamar’s conference call:

• Linamar reported Q3 sales of CAD 3.1 billion, up 21%, with normalized net earnings up 2.3% and EPS up 3.2% year over year. Management said its full-year outlook is unchanged and still calls for double-digit sales and normalized EPS growth, with record sales and earnings expected.
• Mobility earnings were nearly flat despite higher sales, as weaker vehicle production, extended customer shutdowns, slower launch ramps, and unfavorable mix weighed on results. For Q4, the company expects mobility earnings to be flat year over year and consolidated normalized EPS to decline.
• Linamar cited record new-business wins in Canada and the U.S., record wins in China, and double-digit global mobility content-per-vehicle growth. Management said these gains, along with acquisitions and launches, support future growth even in soft markets.
• Industrial sales rose 23%, while normalized earnings increased 5.8%, led by Skyjack access-equipment demand and agricultural market-share gains. Skyjack volumes were up 41% year to date, and management pointed to continued demand from data-center construction and other infrastructure projects.
• Cash generation remained strong, with Q3 free cash flow of CAD 190 million, year-to-date free cash flow above CAD 645 million, and net debt to EBITDA of 0.47x. The company also renewed its share-buyback program; management said more than 90% of sales are not affected by tariffs, though tariffs continue to pressure some industrial earnings.

Linamar Stock Performance

Shares of LNR stock opened at C$92.78 on Thursday. The firm’s 50 day moving average price is C$95.04 and its 200-day moving average price is C$94.99. The company has a debt-to-equity ratio of 32.89, a quick ratio of 0.75 and a current ratio of 1.88. Linamar has a one year low of C$73.27 and a one year high of C$110.58. The firm has a market cap of C$5.47 billion, a P/E ratio of 8.10, a P/E/G ratio of 1.12 and a beta of 1.62.

Insider Buying and Selling at Linamar

In related news, Director Mark Stoddart sold 18,932 shares of Linamar stock in a transaction that occurred on Tuesday, August 18th. The shares were sold at an average price of C$105.58, for a total value of C$1,998,840.56. Following the completion of the sale, the director owned 455,914 shares in the company, valued at approximately C$48,135,400.12. This trade represents a 3.99% decrease in their position. Insiders own 33.49% of the company’s stock.

Analyst Upgrades and Downgrades

A number of brokerages recently commented on LNR. Canadian Imperial Bank of Commerce lifted their price objective on Linamar from C$115.00 to C$120.00 in a research report on Thursday, August 13th. Scotiabank upped their target price on Linamar from C$102.00 to C$114.00 and gave the company a “sector perform” rating in a report on Thursday, August 13th. TD cut their price objective on shares of Linamar from C$123.00 to C$120.00 and set a “buy” rating for the company in a research report on Thursday, October 8th. Finally, BMO Capital Markets cut shares of Linamar from an “outperform” rating to a “hold” rating and set a C$105.00 price objective for the company. in a research report on Friday, September 18th. Three equities research analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company’s stock. According to MarketBeat, the stock currently has an average rating of “Hold” and an average target price of C$110.29.

Linamar Company Profile

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.