Linde (LIN) Q2 2026: Sales Up 9%, Margin Streak Ends, Stock Falls 5%
After three years of a flat top line, Linde finally delivered growth — and the margin machine that carried the stock through the drought stopped expanding for the first time in this three-year run. Second-quarter sales of $9,289 million rose 9.3% from $8,495 million, but reported operating margin slipped to 27.49% from 27.71%, ending a run that had added 191 basis points in 2024 and 129 basis points in 2025. The reason sits in the composition: of the nine points of growth, only four came from price and volume, while currency, acquisitions, cost pass-through and engineering supplied the rest — and the lower-quality half of that mix carries little or no profit. For an industrial gas company whose entire equity story rests on pricing power converting into structural margin gains, the quarter where revenue finally moved is also the quarter where the conversion rate fell.
The distinction worth holding onto is that this is not the first time Linde's headline margin has moved down — the 2022 energy spike inflated the revenue denominator so violently that the company reported margins on an ex-pass-through basis to be understood at all. What is new is that the ex-pass-through margin itself has turned. Through 2025 that underlying measure still expanded 90 to 200 basis points each year. This quarter it fell roughly 30 basis points, a figure management confirmed on the earnings call. The market took the point: shares fell 5.15% to $416.40 on the release, despite a headline beat.
1. Condensed Consolidated Balance Sheet
1-1. Principal Asset Items
| Item | Dec 31, 2025 ($M) | Jun 30, 2026 ($M) | Change % |
|---|---|---|---|
| Cash and cash equivalents | 5,056 | 4,898 | −3.1% |
| Accounts receivable — net | 4,966 | 5,632 | +13.4% |
| Contract assets | 269 | 432 | +60.6% |
| Inventories | 2,055 | 2,122 | +3.3% |
| Property, plant and equipment — net | 28,260 | 29,170 | +3.2% |
| Goodwill | 27,927 | 27,927 | 0.0% |
| Other intangible assets — net | 11,871 | 11,564 | −2.6% |
| Total assets | 86,817 | 88,349 | +1.8% |
Source: Linde plc Form 10-Q for the quarter ended June 30, 2026, condensed consolidated balance sheet.
