Linamar (LNR) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 sales of CAD 2.94 billion, up 16.1% year-over-year, and record normalized net earnings of CAD 195.8 million, up 17.1% year-over-year, driven by strong Mobility segment growth and strategic acquisitions.

• Normalized EPS rose 18.8% to CAD 3.28; free cash flow surged to CAD 218.6 million, an unusually strong Q1 result.

• Over 90% of sales are unaffected by tariffs, with mitigation strategies in place for impacted segments.

• Continued disciplined capital allocation, including share repurchases, strategic acquisitions, and strong cash generation.

• Major new business wins in Q1, totaling CAD 758 million, the highest since 2014.

Financial highlights

• Q1 sales reached CAD 2.94 billion, up 16.1% year-over-year; Mobility segment sales rose 19.2% to CAD 2.26 billion, Industrial sales increased 6.6% to CAD 675.4 million.

• Normalized net earnings were CAD 195.8 million (6.7% of sales); normalized EPS was CAD 3.28, up 18.8% year-over-year.

• Free cash flow was CAD 218.6 million, up 186% year-over-year.

• Net debt to EBITDA improved to 0.6x; liquidity at CAD 2 billion, with CAD 805.6 million available on credit facilities.

• Share repurchases since November 2024 total CAD 159 million (2.4 million shares cancelled).

Outlook and guidance

• Double-digit sales and normalized EPS growth expected for Q2 and full year 2026, with strong Mobility offsetting Industrial softness.

• Modest contraction in normalized net margins anticipated due to new 232 tariffs impacting Industrial segment.

• Mobility segment expected to continue double-digit growth, supported by launches and acquisitions.

• Industrial segment faces margin pressure from tariffs and weak agricultural markets, but access equipment sales provide partial offset.

• CapEx to increase but remain below normal range as a percent of sales; free cash flow to remain strongly positive.