Linde Q3 2026: GAAP EPS fell 11% to $3.66 on a $425M charge; adjusted EPS rose 9% to $4.59

Linde, the world's largest industrial-gas company, posted record third-quarter sales of $9,404 million, up 9% from $8,615 million, and its own adjusted EPS rose 9% to a record $4.59, ahead of the $4.45–$4.55 it had guided. The GAAP figures went the other way: operating profit fell 9% to $2,150 million and diluted EPS fell 11% to $3.66, because Linde booked $425 million of "cost reduction program and other charges" in the quarter, against an $11 million credit a year earlier. Of that, $200 million is global severance, $42 million other cost-cutting, and $183 million is non-cash charges "primarily related to the U.S. homecare business," a unit Linde moved out of its Americas segment this quarter.

Key figures

Operating margin is the share of sales left after running the business, before interest and tax. "Adjusted" figures are Linde's own non-GAAP measures, which strip out restructuring charges and the extra depreciation and amortization created when Praxair and Linde AG merged in 2018. Q3 2025 operating cash flow is derived from the year-to-date figures in the Q2 2025 and Q3 2025 cash flow statements.

Where the growth came from

Segment profit is Linde's adjusted measure; prior-year figures were recast to move U.S. homecare from Americas into Other.

• Americas did the heavy lifting: pricing added 6% to sales, "primarily from ongoing price actions in addition to recovery of costs incurred in the current and prior periods," and volumes 3% (electronics, chemicals and energy, metals and mining). Profit rose 12%, the fastest of the regions.
• APAC had the strongest volume, +5%, from electronics, chemicals and energy and "project start-ups", that is, plants from past backlog coming online. Currency added 3%. Its margin slipped 0.7 points; Linde says 0.4 points excluding pass-through.
• EMEA grew 7%, but 3 points of that was cost pass-through (energy costs billed on to on-site customers, which adds sales but almost no profit) and price added 2%. Volume rose 1%, after falling over the first half. The 0.8-point margin dip is, per the release, flat once pass-through is removed.
• Engineering (building plants for third parties) grew 12% on project timing. Order intake was $499 million and the third-party equipment backlog $2.9 billion.
• Other is where the homecare problem sits: profit fell 32% "primarily due to declines in the U.S. homecare business."

What the headline numbers hide

• The GAAP decline is mostly charges, plus a tough tax comparison. Pretax income before equity investments fell from $2,360 million to $2,128 million on a GAAP basis but rose 7.5% to $2,745 million once the charges and merger accounting are removed. The GAAP tax rate also rose to 21.1% from 18.0%, which the filing attributes to "the impact of a tax rate change in EMEA in 2025" that lowered last year's tax bill; that is visible in the merger-accounting tax adjustment, $155 million a year ago against $43 million now. So last year's GAAP EPS was flattered and this year's is depressed by charges.
• Part of the charge is a write-down, not cash. $183 million of the $425 million is non-cash and mainly tied to U.S. homecare; the $200 million of severance is cash and comes on top of a headcount already down 977 to 64,512 from a year ago.
• Buybacks did about 2 points of the adjusted EPS growth. Adjusted net income rose 6.8% while adjusted EPS rose 9.0%, because the diluted share count was 1.9% lower. Linde bought back $954 million of shares in the quarter (1.94 million shares at an average $491) and paid $735 million in dividends. A higher adjusted tax rate (23.8% vs 22.7%) worked against EPS; higher equity-investment income (+$20 million adjusted) worked for it.
• Cash conversion is strong. Operating cash flow of $3,169 million was 1.8 times net income including minority interests ($1,740 million), as is normal for a business with $965 million of quarterly depreciation. After $1,392 million of capital spending, free cash flow was $1,777 million. Year to date, working capital absorbed $775 million versus $461 million a year earlier, a modest drag worth watching.
• The margin is not expanding. Adjusted margin was 29.4% against 29.7%; Linde says it is flat excluding cost pass-through. Price is still covering cost inflation, but not by more than it was.
• The sale-of-gas backlog shrank slightly. The estimated capital cost of large plants under construction for long-term supply contracts was about $7.9 billion, down from roughly $8.1 billion at June 30, as projects start up faster than new ones are signed. Linde's headline "project backlog $11 billion" adds the $2.9 billion third-party engineering backlog.

On balance the quarter is understated: GAAP EPS fell 11% because of $0.57 a share of restructuring and homecare charges and a prior-year tax benefit, while the operating business grew adjusted profit 8%. About 2 of the 9 points of adjusted EPS growth came from the smaller share count.

Takeaway: Strip out the $425 million charge and Linde had the same quarter it has been having all year: 5% underlying sales growth, 8% adjusted profit growth and about 2 points of buyback help on top. The real news is in the charge itself. Paying $200 million of severance and writing down U.S. homecare suggests management is pruning a weak unit to protect margins, as backlog growth has stalled at around $8 billion.

Did last time's read hold up?

Our Q2 2026 report said the 6–8% Q3 guide implied steady underlying growth, named volume, especially EMEA's contracting manufacturing demand, as the main risk, and flagged electronics as the driver to watch. That held up and slightly better: adjusted EPS of $4.59 beat the top of the $4.45–$4.55 range, EMEA volumes turned to +1% from declines in the first half, and electronics again led volume in the Americas and APAC. Adjusted margin dipped again (29.4% vs 29.7%), as it did in Q2. The large restructuring charge was not anticipated.

Outlook

For Q4 2026, Linde expects adjusted diluted EPS of $4.40–$4.50, up 5–7% with no currency effect, which is slower than the 9% delivered in Q3. Full-year adjusted EPS guidance is $17.82–$17.92, up 8–9% "when assuming favorable currency of 2%"; in July the range was $17.70–$17.90 on a 1% currency tailwind. The growth range is unchanged while the currency help assumed inside it doubled, so the underlying expectation has, if anything, edged down slightly. Capital spending is still guided at $5.5–6.0 billion; nine-month capex of $4.17 billion puts it at the low end.

Our read: Linde's earnings engine of pricing, productivity and buybacks is intact and predictable, but Q4's 5–7% guide and a flat-to-down sale-of-gas backlog point to adjusted EPS growth settling into mid-to-high single digits. CEO Sanjiv Lamba said proposal activity "remains robust, particularly across electronics." Next quarter, watch whether that turns into a backlog back above $8 billion, whether EMEA volume stays positive, and whether the homecare restructuring lifts the Other segment's 4.4% margin.

Source: Linde plc Form 10-Q for the quarter ended September 30, 2026 (filed October 29, 2026), with guidance, quarterly free cash flow and engineering order intake from the Q3 2026 earnings release (Form 8-K, Exhibit 99.1, October 29, 2026).