Investopedia: Lincoln Electric: A Quality Niche Industrial

With a 42% rise in the stock over the past year and 140% since early 2009 lows, clearly there have been rewards for the nimble and patient with welding equipment maker Lincoln Electric (Nasdaq:LECO). Lucky for Lincoln Electric, though, welding is strongly tied to industrial activity, and the company seems to be looking at a prolonged multi-year recovery in business.   

A Solid End to a Rebound Year
Lincoln Electric surpassed analyst expectations for the fourth quarter, posting 22% revenue growth and surpassing the high-end analyst estimate by 7%. Those results are good enough in their own right; even better when considering the 9% sequential growth and the historical trend for the fourth quarter to be soft. Looking at the company's markets, North American sales jumped 25%, while South America was the laggard at 8% growth. Overall, the company saw volume increase 20% - a strong testament to the increased business activity and product demand.

Profitability was more of a mixed bag for the company. Gross margins shrank by nearly three full points as the company reversed a large LIFO credit to a small charge, but the company did recover a lot of this through an even bigger reduction in SG&A spending. All in all, adjusted operating income rose 26%, while adjusted net income increased 38%. 


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http://stocks.investopedia.com/stock-analysis/2011/Lincoln-Electric-A-Quality-Niche-Industrial-LECO-ITW-CAT-F-ABB0224.aspx.