Welding equipment manufacturer Lincoln Electric (NASDAQ: LECO) reported Q1 CY2026 results topping the market’s revenue expectations, with sales up 11.7% year on year to $1.12 billion. Its non-GAAP profit of $2.50 per share was 2.9% above analysts’ consensus estimates.

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“We achieved solid first quarter performance driven by disciplined cost management and improving industrial activity in the Americas,” said Steven B. Hedlund, Chairman and Chief Executive Officer.

Company Overview

Headquartered in Ohio, Lincoln Electric (NASDAQ: LECO) manufactures and sells welding equipment for various industries.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Thankfully, Lincoln Electric’s 9.9% annualized revenue growth over the last five years was solid. Its growth beat the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Lincoln Electric’s recent performance shows its demand has slowed as its annualized revenue growth of 2.6% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

Lincoln Electric also reports organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Lincoln Electric’s organic revenue was flat. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results.

This quarter, Lincoln Electric reported year-on-year revenue growth of 11.7%, and its $1.12 billion of revenue exceeded Wall Street’s estimates by 4.2%.

Looking ahead, sell-side analysts expect revenue to grow 4.4% over the next 12 months. Although this projection indicates its newer products and services will fuel better top-line performance, it is still below the sector average.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Lincoln Electric has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 16.3%. This result isn’t too surprising as its gross margin gives it a favorable starting point.

Looking at the trend in its profitability, Lincoln Electric’s operating margin rose by 1.7 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Lincoln Electric generated an operating margin profit margin of 16.6%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Lincoln Electric’s EPS grew at 17.8% compounded annual growth rate over the last five years, higher than its 9.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into Lincoln Electric’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Lincoln Electric’s operating margin was flat this quarter but expanded by 1.7 percentage points over the last five years. On top of that, its share count shrank by 8.3%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Lincoln Electric, its two-year annual EPS growth of 3.6% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q1, Lincoln Electric reported adjusted EPS of $2.50, up from $2.16 in the same quarter last year. This print beat analysts’ estimates by 2.9%. Over the next 12 months, Wall Street expects Lincoln Electric’s full-year EPS of $10.22 to grow 8.5%.

Key Takeaways from Lincoln Electric’s Q1 Results

We were impressed by how significantly Lincoln Electric blew past analysts’ revenue expectations this quarter. We were also happy its adjusted operating income outperformed Wall Street’s estimates. On the other hand, its organic revenue missed. Zooming out, we think this was a mixed quarter. The stock remained flat at $256.43 immediately following the results.

Is Lincoln Electric an attractive investment opportunity at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).