Lincoln Electric Holdings Inc.’s (LECO) subsidiary, The Lincoln Electric Company, has acquired the assets of privately held RealWeld Systems, Inc.
RealWeld Systems' RealWeld Trainer solution offers hands-on arc welding training and evaluation. The acquisition will augment Lincoln Elctric’s existing educational offering and strengthen its position as a market leader in welding education in North America.
Lincoln Electric Holdings' third-quarter adjusted earnings increased 9% to 94 cents per share from 86 cents in the year-ago quarter driven by strong top-line growth and margin contributions from North America Welding and Europe Welding segments. Earnings also beat the Zacks Consensus Estimate of 90 cents.
RealWeld will operate as a part of the Lincoln Electric Automation Solutions Group. In the third quarter, the company advanced its automation solutions with the acquisition of Easom Automation. Easom will provide Lincoln Electric an opportunity to expand its automation capabilities into the heavy fabrication sector. The company also signed a licensing agreement with Helical Robotics to leverage its joint technologies in order to develop a trackless automated welding solution which is expected to commercialize late next year.
Additionally, Lincoln Electric is planning to divest the manufacturing capacity in its Asia-Pacific segment, in sync with its strategic repositioning in the region.
Lincoln Electric will benefit from improving end market trends in the general fabrication and structural sectors. Demand for innovative solutions combined with benefits from strategic initiatives and accelerated returns will also drive growth. The company’s share repurchase activity will also be accretive to earnings, going forward. However, weakness in the global mining sector and volatility in raw material price are headwinds in the near term.
Currently, Lincoln Electric carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the industrial products sector include Blount International Inc. (BLT), Pioneer Power Solutions, Inc. (PPSI) and AO Smith Corp. (AOS). While Blount International and Pioneer Power Solutions sport a Zacks Rank #1 (Strong Buy), AO Smith carries a Zacks Rank #2 (Buy).
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