Oct 27, 2026 earnings call — Record quarter, automation momentum and ExpertLink launch
Lincoln reported record third quarter sales of $1.221 billion and adjusted EPS up 21% to $2.98.
Revenue $1.2B (est $1.2B) · EPS $2.98 (est $2.81)
Key quotes
"This capability significantly reduces barriers to adoption and broadens the market for cutting and welding automation."
"we reported record third quarter sales and earnings performance with adjusted EPS increasing 21% to $2.98."
"However, energy, logistics, and electronic component costs continue to increase with unprecedented AI data center demand creating spot shortages for some raw materials."
Analyst Q&A 8
automation demand and Middle East
Q (Brian Blair · Oppenheimer): Asked for more color on automation momentum, quoting across end markets, and outlook for automation revenue in 2026 and 2027. Also asked how Middle East exposure and potential rebuilding could affect the business.
A: Management said quoting activity is very active and broad based, and they expect continued automation growth at a high single digits organic rate. They exited Q3 at a low double digit EBIT profile and expect similar in Q4. For the Middle East they saw a $5 million headwind, are well positioned, and expect headwinds to become volume opportunities as the conflict resolves.
"So we are we are really keen on a continued progression of growth in our automation business and think about that in the high single digits organic type growth." — Gabriel Bruno (CFO)
pricing and inflation outlook
Q (Morgan Stanley): Asked about price-cost dynamics, customer price elasticity, and ability to keep pushing price amid inflation. Also asked what key cost buckets look like into 2027.
A: Management said channel partners and end users understand the inflationary pressure and they are not seeing large pushback on price. They expect about a 100 basis points incremental pricing impact in the welding business that leads to a price-cost neutral posture in Q4. They reiterated mid to high single digit organic growth into 2027 and will continue to monitor inflation and respond as appropriate.
"So we have maintained that posture, but as you know, we will continue to monitor the persistent inflationary dynamics and respond as appropriate." — Gabriel Bruno (CFO)
cyclical vs secular automation growth
Q (UBS): Asked whether automation growth is cyclical (auto recovery) or secular (broader adoption), and whether the high-teens automation growth is temporary. Also asked about incremental margins going into next year.
A: Management said automotive went through an 'air pocket' of delayed decisions and is now returning to more normal activity, so part of the step-up is a return to normalcy. They also said broader adoption is early innings and the new Physical AI platform was just launched so benefits are not yet in orders. For margins they expect mid-twenties incremental margins exiting Q4 with a line of sight to drive to high 20s, targeting about 60 basis points of improvement per year.
"I would start with that mid twenties as we exit Q4, but our line of sight is to drive to that high 20s incremental margin." — Gabriel Bruno (CFO)
2027 visibility and Harris pricing
Q (Mircea Dobre · Baird): Asked if automation has enough near-term visibility to continue growth into 2027 or if the gains are more for 2028/2029. Also asked about timing of negative pricing at Harris and how silver price moves flow to EBIT.
A: Management said they are talking about the next 12 months and expect high single digit automation growth with incoming orders and a record backlog that give confidence into 2027, while long lead items will affect 2028 and 2029. For Harris, using a silver price in the high fifties/low sixties per troy ounce implies low double digit price increases in Q4 versus mid-twenties in Q3 and supports an 18% EBIT profile; they manage pricing to keep gross margin percentage steady and note a looming comp on silver into next year while seeing demand pickup for cooling systems.
"We have seen enough in incoming orders and another record level backlog that gives us confidence of strong momentum going to 2027." — Gabriel Bruno (CFO)
new products and CapEx
Q (D. A. Davidson): Asked how customers reacted to new products like ExpertLink and Physical AI and whether those products came from customer requests. Follow-up asked for color on higher CapEx.
A: Management said customer reaction at FabTech was extremely positive and the products target real customer pain points. ExpertLink was primarily internally driven from the company's experience rather than direct customer requests. On CapEx they will keep investing in capacity and capabilities to drive organic growth and are increasing investment because execution capacity — not willingness to invest — was historically the rate-limiting factor.
"And all of the products we are launching are directly aimed against customer pain points." — Steven Hedlund (CEO·CHAIR)
big auto launches and AI cobot
Q (Nathan Jones · Stifel): Asked about the opportunity from large 2029/2030 automotive model launches and whether that mainly hits revenue in 2028. Also asked how the AI-powered cobot could expand addressable market over the next few years.
A: Management said automotive automation spending is driven by model changeovers and production rate-driven capacity investments; they are benefiting from model changeovers now but have not yet seen large capacity investments because build rates are still fairly low. On the AI cobot, management said customers' top pain is part variability and the new platform lets a robot adapt like a human with no extra programming, and customers called it a game changer; they will have better perspective on TAM expansion through 2027 as customers deploy ExpertLink.
"The feedback that we were getting at the show was this is an absolute game changer." — Steven Hedlund (CEO·CHAIR)
sales focus and subscription pricing
Q (KeyBanc): Asked whether sales efforts focus on new customers who have not automated versus adding applications with existing automated customers. Also asked about Q4 price-cost neutral and starting incremental margins for 2027.
A: Management said both approaches are in play: deploy ExpertLink into existing customers like Xiemann and target customers who tried cobots but could not use them due to part variability. ExpertLink has a subscription element — first year is included, then about $3 thousand a year per device. They said gross profit margin will exceed prior year Q4 and they expect mid-twenties incremental margins starting point for 2027.
"And so that is what we are trying to address with this technology platform is to really deliver on what the initial promise and premise of a robotic welding was." — Steven Hedlund (CEO·CHAIR)
competitor tornado and data center exposure
Q (Walter Liptak · Seaport): Asked if the solid equipment growth was from picking up business after a competitor's tornado or a market share gain. Also asked how much of Harris and the welding business is tied to data center activity.
A: Management said it is difficult to assess competitive impacts but they saw consistent demand on standard equipment tracking at high teens and similar momentum into Q4. At Harris they estimate mid to high single digits of the Harris segment are exposed to data center activity, and overall less than 5% of their total business is tied to data centers; they also noted easier comps after 2025 destocking and good momentum on Harris into Q4.
"So, Walter, at Harris, we estimate between mid to high single digits of our Harris segment to be exposed to data center activity." — Gabriel Bruno (CFO)