Linamar (LNR) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 sales of CAD 3.14 billion, up 18.8% year-over-year, with strong earnings growth and nearly 10% EPS growth, driven by exceptional performance in the mobility segment and robust new business wins in North America.

• Mobility segment delivered record sales and nearly 30% earnings growth, with market share gains in every region, offsetting softness in the agricultural business and tariff impacts in industrial.

• Industrial segment saw strong access equipment sales but faced headwinds from tariffs and weak agriculture markets.

• Over 90% of sales are not impacted by tariffs, and mitigation strategies are in place to address tariff headwinds in the industrial segment.

• Strategic acquisitions and program launches contributed significantly to top and bottom line growth, while operational flexibility and prudent capital management supported resilience amid market volatility.

Financial highlights

• Q2 normalized net earnings were CAD 183 million (5.8% of sales), up 8.7% year-over-year; normalized EPS was CAD 3.08, up 9.6%.

• Free cash flow reached CAD 236.5 million in Q2 and almost CAD 500 million year-to-date.

• Net debt to EBITDA improved to 0.5x from 1.02x a year ago, with liquidity at CAD 2 billion and available credit of CAD 725.2 million.

• Mobility sales rose 20.5% to CAD 2.36 billion; industrial sales increased 13.8% to CAD 783.5 million, driven by access equipment.

• Normalized industrial operating earnings fell 23.8% to CAD 78.7 million, mainly due to tariffs and weak AG markets.

Outlook and guidance

• Double-digit sales and normalized earnings growth expected in Q3 for mobility, with margins flat year-over-year.

• Industrial segment to see sales growth but double-digit decline in normalized operating earnings and margin contraction due to tariffs and AG softness.

• Full-year 2026 guidance unchanged: strong double-digit sales growth, EPS growth, modest reduction in normalized net margins due to tariffs, and robust free cash flow.

• CapEx to increase from prior year but remain below normal range as a percent of sales.

• FY 2027: Continued growth in sales and EPS, margin expansion, and strong balance sheet.