Linde Profit Jumps 14 Percent on Demand for Medical Offerings
Linde AG (LIN), the German industrial gases company that bought U.S. respiratory-therapy provider Lincare last year, reported a 14 percent rise in second-quarter profit on growing demand for health-care offerings.
Operating profit climbed to 1.01 billion euros ($1.3 billion) from 885 million euros a year earlier, the Munich-based company said today in a statement. That matched the 1 billion-euro estimate of 16 analysts surveyed by Bloomberg. Revenue increased 11 percent to 4.2 billion euros.
Linde is pushing into new markets to reduce reliance on more cyclical products such as supplying oxygen and other gases to welders and steel plants. The $3.8 billion acquisition of Clearwater, Florida-based Lincare doubled Linde’s North America gas sales, and it also bought the former home-care business of Air Products & Chemicals Inc. (APD) in January 2012.
“Although the economic tailwind has subsided somewhat, we have continued to achieve profitable growth,” Chief Executive Officer Wolfgang Reitzle said. “The expansion of our health-care operations in particular made the greatest contribution here.”
Linde reiterated this year’s target of at least 4 billion euros in operating profit, which the company defines as earnings before interest, taxes, depreciation and amortization, and is seeking a return on capital employed of about 14 percent in 2016. Reitzle is set to step down in May 2014.
The CEO is also pursuing savings intended to cut as much as 900 million euros in costs.
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