Lincoln Electric Cuts Outlook

smartmoney.com March 11, 2003

Market Monitor  DJIA  7821.75 269.68   Nasdaq  1340.78 61.54   Rus. 2000  355.44 9.50  LECO 17.30 1.04 6.40%

CLEVELAND (Dow Jones)--Lincoln Electric Holdings Inc. (LECO) warned first-quarter earnings before items could fall as much as 22% from a year ago because of declining U.S. sales and higher pension charges.

In a press release Tuesday, the maker of arc welding products said it expects first-quarter earnings of 32 cents to 34 cents a share, excluding a goodwill charge for a change in accounting principle and certain rationalization charges.

Analysts surveyed by Thomson First Call were expecting earnings of 40 cents a share.

In the year-ago first quarter, Lincoln posted earnings of 41 cents a share, excluding the effect of an accounting change and rationalization charges.

Shares of Lincoln were halted on Nasdaq at $18.98, up 39 cents, or 2.1%. The company's shares fell to a 52-week low of $18.25 on Monday.

Lincoln said the economic and political difficulties in Venezuela have caused the results there to be below expectations.

The company is forecasting flat first-quarter sales compared with year-ago sales of $248.4 million. U.S. sales were down about 5% due to the decline in the demand for welding products in the stagnant U.S. industrial market.

Last month, Lincoln said pension costs would be higher by $15 million in 2003. However, the company said Tuesday the principal reason for the expected earnings decline is lower domestic U.S. market sales, resulting in lower gross profit.

To offset the effect in future quarters, Lincoln said it implemented a program to reduce and eliminate costs, including salaried personnel reductions and organizational consolidations. The benefits of these actions will begin in the second quarter of 2003. A company spokesman wasn't immediately available to comment on these cost-cutting actions.

Lincoln Electric will report first-quarter results on April 16. Company Web site: www.lincolnelectric.com -Stephen Lee; Dow Jones Newswires; 201-938-5400 (END) Dow Jones Newswires 03-11-03 1723ET