By Bartosz Dabrowski
(Reuters) -Linde, the world's largest industrial gas company, is targeting 10%-13% growth in adjusted earnings per share (EPS) in 2022, after reporting better-than-expected fourth-quarter earnings on Thursday.
The U.S.-German company said it would achieve the target thanks to higher pricing, strong volumes and productivity initiatives across all business areas, which should offset the increasing energy price inflation.
Linde (NYSE:LIN), which supplies gases such as oxygen, nitrogen and hydrogen to factories and hospitals, reported fourth-quarter adjusted EPS of $2.77, above the $2.67 expected on average by analysts according to a Refinitiv poll.
"Beat notable following some concern after competitor miss on energy inflation," analysts from Cowen said in a note.
Energy price inflation introduced volatility to industrial gas companies' revenue and profit.
Linde's U.S. rival Air Products (NYSE:APD) last week reported fiscal first-quarter EPS of $2.52, which was slightly above a Refinitiv estimate. However, the company's margins were affected by higher energy costs.
"We will continue to see pricing going forward, and we will recover that cost inflation as we've done over decades," Linde's Chief Operating Officer Sanjiv Lamba said in a call with analysts.
Chief Executive Steve Angel said higher power costs do not have a direct impact on the acceleration of hydrogen projects for the company.
Lamba, who will succeed Angel as chief executive from March 1, added the electronics division would probably be the strongest growth contributor to Linde's gas sale backlog for the next couple of years.
Linde has consistently beaten analysts' quarterly estimates over the past two years, benefiting from pandemic-driven demand for consumer electronics and growing hydrogen investments as countries look to cut back on emissions.
The group's total sales grew 14% at $8.3 billion for the October-December period.
Linde's Frankfurt-listed shares were up 3% as of market close at 1630 GMT, and were among top performers on Germany's blue-chip index.