Zacks Investment Research downgraded
Lincoln Electric Holdings Inc.
) to a Zacks Rank #5 (Strong Sell) on May 20.
Why the Downgrade?
Lincoln Electric witnessed sharp downward estimate revisions after
reporting disappointing first-quarter 2014 results on April 23.
Shares of this full-line manufacturer and reseller of welding and
cutting products have also witnessed downward price movement since
the first-quarter results.
Lincoln Electric's first-quarter earnings per share came in at 91
cents, a 1.1% decline from 92 cents per share in the year-ago
quarter. Earnings, however, beat the Zacks Consensus Estimate by a
Total revenue also declined 4.7% year over year to $685 million,
due to a 5% fall in volumes that offset the benefits achieved from
acquisitions and a steady price-performance. Moreover, the reported
figure lagged the Zacks Consensus Estimate of $734 million.
The operating environment in Venezuela will continue to remain a
challenge in 2014 for Lincoln Electric due to the persistent
economic uncertainty prevalent in the country and limitation of
converting bolivars to the U.S. dollar. Moreover, weakness within
the global mining sector and volatility in raw material price are
headwinds in the near term.
The Zacks Consensus Estimate for the second quarter of 2014 plunged
11% to 89 cents per share over the last 30 days. Likewise for
fiscal 2014, the estimates dropped 8% to $3.60 a share. All the 6
estimates have undergone downward revision for the second quarter
as well as for fiscal 2014.
Other Stocks to Consider
Not all machinery stocks are performing as poorly as Lincoln
Electric. Some better-ranked stocks are
Blount International Inc.
). While Gorman-Rupp holds a Zacks Rank #1 (Strong Buy), Blount
International and IDEX carry a Zacks Rank #2 (Buy).
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IDEX CORP (IEX): Free Stock Analysis Report
LINCOLN ELECTRC (LECO): Free Stock Analysis
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