Unpacking the high 30% growth in Gen Fab, specifically price vs. volume contribution, and implications for H2 volume growth.

Americas Welding consumable volumes were up low double digits, contributing significantly. A component of the increase was tied to automation projects. Broad-based strength across general industries is observed, with optimism tied to improving PMI data. “our volumes, particularly on consumables in the Americas Welding segment were up low double digits. So we're pleased with the mix. We do have a significant component of the overall increase tied to automation projects in this first quarter.”

Whether automation was a drag on Americas margin and the outlook for automation margins given the mid-teens target.

Automation margins did experience some pressure in Q1, but the primary drivers for Americas Welding margin decline were price/cost timing and increased corporate allocations. Automation business is expected to track with a high single-digit margin as volumes improve. “For the first quarter, we did have some pressure on automation margins. As you know, that's dilutive to overall business wasn't as a key driver to the overall margin performance in the Americas Welding segment because, as I mentioned, it was driven by price/cost we're trailing a bit there as well as the increase in corporate allocations into the segment, which is about 40 basis points.”

When price/cost neutrality is expected, if the new pricing actions are embedded in the sales guide, and the pace of Harris price moderation.

Price/cost neutral is expected by Q3. New pricing actions (effective May) are embedded in the updated sales guide. The increase in sales growth assumption (300-400 bps) is about 1/4 from new price actions and the balance from Harris. Harris price moderation is expected from Q1 record levels. “I would expect price cost neutral as we enter the third quarter. So the timing of the price increases will have an impact positively in the second quarter, but we'll have the full impact in the third quarter.”

LECO

Lincoln Electric (LECO) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Industrials· Apr 30, 2026

Source: earnings call transcript

Executive summary

Lincoln Electric Q1 FY26 — Record Sales and Adjusted EPS Amidst Geopolitical Headwinds

Lincoln Electric delivered strong Q1 FY26 results with record sales and adjusted EPS, driven by robust Americas demand in general fabrication and energy. The company navigated geopolitical complexities and inflationary pressures by implementing new pricing actions to restore price/cost neutrality. Strategic investments in automation and customer service initiatives underpin long-term growth, while temporary inventory builds impacted cash flow.

Highlights

Achieved record quarterly sales of $1.121 billion, an increase of approximately 12% year-over-year.
Delivered record adjusted diluted EPS of $2.50, representing a 16% increase year-over-year.
General fabrication end market showed high 30% growth, driven by accelerated factory activity and data center/HVAC projects in the Americas.
Harris Products Group adjusted EBIT increased approximately 68% to $41 million, with its margin improving 330 basis points to 21.2%.
Americas Welding segment volume declines narrowed to 40 basis points, with orders accelerating through the quarter.

Concerns

Gross profit margin declined 80 basis points to 35.6%, impacted by lower volumes, timing of price/cost recovery, and a $1 million LIFO charge.
Price/cost was unfavorable by 90 basis points in the quarter, as higher prices did not fully offset inflation.
International Welding segment volumes decreased 10%, primarily due to automation project timing and the Middle East conflict.
Estimated an approximate $8 million sales impact from the Middle East conflict in Q1, with an expected $8 million to $10 million impact per quarter while it persists.
Cash flows from operations were seasonally lower and further affected by a temporary increase in inventory levels.

Guidance & targets

Category	Target	Timeline	Confidence
Net sales growth	high single-digit percent range high materiality	FY26	High
Organic sales mix	3.75% price at a mid-single digit percent rate and 1 quarter volume medium materiality	FY26	Medium
Middle East conflict sales impact	$8 million to $10 million per quarter medium materiality	per quarter	Medium
M&A benefit (Alloy Steel acquisition)	70 basis point M&A benefit low materiality	FY26	High
Operating income margin improvement	maintaining our other full year assumptions high materiality	FY26	High
Americas Welding segment EBIT margin	mid-18 to mid-19% EBIT margin range medium materiality	remainder of the year · FY26	High
International Welding segment margin	11% range medium materiality	until conditions improve in the Middle East	Medium
Harris segment margin	19% to 20% margin range medium materiality	ongoing	High
SG&A run rate	$250 million per quarter low materiality	balance of the year · FY26	High
Corporate expense	$1 million to $2 million per quarter low materiality	balance of the year · FY26	High
Price cost posture	neutral high materiality	Q3 · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Americas Welding Sales growth driven by higher price and favorable foreign exchange translation, partially offset by narrowing volume declines. Adjusted EBIT margin declined 100 basis points primarily due to timing of price/cost recovery and higher corporate expense allocation. Price: nearly 8% higherForeign exchange translation: 1% favorableVolume declines: narrowed to 40 basis points	—	increased approximately 8%	—	17.2%
International Welding Sales increase primarily from favorable foreign exchange translation and strong sales from the Alloy Steel acquisition, partially offset by 10% lower volumes due to automation project timing and the Middle East conflict. Adjusted EBIT margin declined 50 basis points due to lower volumes and higher corporate expense allocation. Foreign exchange translation: favorableAlloy Steel acquisition: strong salesVolumes: 10% lower	—	increased approximately 4%	—	9.7%
Harris Products Group Sales growth led by 41% higher price, effectively mitigating record high metal costs. Segment achieved neutral price/cost target. Adjusted EBIT increased approximately 68% to $41 million, with margin improving 330 basis points, reflecting SG&A leverage from higher sales and favorable mix. Price: 41% higherPrice/cost: neutralVolumes: compression narrowed	—	increased 42%	—	21.2%

Orderbook & backlog

Automation order rates and backlog levels strong April

continued acceleration

in the Americas

Equipment order rates and backlog levels strong April

continued acceleration

in the Americas

Product announcements

Product	Type	Timeline	Details
Automated Manufacturing Line	launch	Q1 FY26
Center-led Process Innovation Function	launch	Q1 FY26

Deals & partnerships

Alloy Steel Acquisition contributing to sales growth

The Alloy Steel acquisition contributed to Q1 sales and is expected to provide a 70 basis point M&A benefit for the full year, anniversaring in early August.

Risks & headwinds

Geopolitical and trade negotiation complexity Q1 FY26 and ongoing

heightened operating complexity

Mitigation:agile operations, customer-focused, investing in long-term growth

Inflationary pressures Q1 FY26 and ongoing

10% higher price did not fully offset inflation; unfavorable 90 basis points price/cost impact

Mitigation:announced new price actions across welding segments effective early May to achieve neutral price/cost target

Middle East conflict Q1 FY26 and persisting

approximate $8 million sales impact in Q1; expected $8 million to $10 million impact per quarter while it persists

Mitigation:engaged with regional customers, global team ready to support repair and expansion needs

International market compression Q1 FY26

10% lower volumes in International Welding segment

Choppiness in European demand Q1 FY26 and ongoing

activity may reflect pre-buying ahead of higher inflation and regional commodity supply concerns

Mitigation:monitoring for consistency

Lower auto production Q1 FY26

slower auto production

Mitigation:offset by factory activity and infrastructure investments in energy and data centers

Challenged end markets (nonresidential structural steel and transportation) Q1 FY26

choppy results quarter-to-quarter

What to watch in Q2 FY26

Americas Welding volume growth

second quarter

Current volume declines narrowed to 40 basis points

Target modest growth

Why it matters

Indicates a recovery in core welding demand in the largest segment, crucial for overall company performance.

We expect volumes to inflect to modest growth in the second quarter.

Find out whether LECO delivers this. Inve re-checks your case every morning.

Q&A highlights

Seeking color on overall demand acceleration and broadening product growth, especially given choppier equipment trends vs. strong consumables.

Management is cautiously optimistic, seeing good order rates in Americas and strong PMI data, but wants more consistency. Europe shows choppiness, and Middle East conflict adds uncertainty. Automation is expected to turn to modest growth in Q2, with broader improvement in H2.

“We're cautiously optimistic, right? We're seeing good order rates in the Americas business. We've got continued strength in the PMI data, conversations with customers are encouraging, but we don't want to get ahead of ourselves, right? We want to see a little bit more consistency month-to-month.”

asked by Bryan Blair · answered by Steven Hedlund

2 min read 6 chapters

Detailed narrative

RISE Strategy and Spotlight Initiative Launch

Lincoln Electric successfully launched its new RISE strategy, marked by early achievements including the U.S. introduction of the Elite customer program. This initiative aims to elevate customer service through superior on-time delivery, hassle-free support, and value-added services. The strategy underscores the company's commitment to long-term growth and reimagining operational processes.

Manufacturing and Process Innovation

The company commissioned a new automated manufacturing line at a Harris facility, significantly boosting productivity and quality. This investment highlights Lincoln Electric's capabilities in advanced manufacturing solutions beyond traditional welding. Additionally, a new center-led process innovation function was established in welding consumables to accelerate product development and market entry.

Americas Demand Trends and Outlook

The Americas region showed encouraging sales and order momentum through April, supported by three consecutive months of expanding manufacturing PMI data. This positive trend is expected to drive modest volume growth in the Americas Welding segment starting in Q2, with further improvements anticipated in the second half of the year if current conditions persist.

International Market Dynamics and Headwinds

Internationally, broad sales improvements were observed in European markets, India, and Australia, with organic sales pivoting to growth in several regions. However, the international business faced headwinds from challenging prior-year comparisons in regional automation and energy projects, as well as an estimated $8 million sales impact from the Middle East conflict in Q1.

End Market Performance Highlights

Three of five end markets achieved flat to higher organic sales growth. General fabrication saw high 30% growth, fueled by Americas factory activity, data center, and HVAC projects. Heavy industries grew, led by global off-highway demand. Energy remained steady, with high teens growth in the Americas offsetting international softness. Nonresidential structural steel and transportation were challenged by international weakness and lower capital spending.

Price/Cost Management and Margin Performance

Despite a 10% price increase, the company's gross profit margin declined 80 basis points due to lower volumes, timing of price/cost recovery, and a $1 million LIFO charge, resulting in an unfavorable 90 basis points price/cost impact. To achieve neutral price/cost, new pricing actions were announced across welding segments, effective early May, with full impact expected in Q3.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.