Lincare draws scrutiny as US home care business drags on Linde margins

CLEARWATER, Fla. – Linde is taking “aggressive actions” to improve operations and productivity within its Lincare business amid persistent headwinds, company officials say.

Linde reported operating margins, excluding cost pass-through, declined about 30 basis points in the second quarter compared to the same period last year, primarily driven by its Americas segment and, more specifically, its U.S. home care business.

“Even though we have been actively pruning this portfolio, it simply has not been enough to overcome the continued headwinds led by higher cost inflation and policy changes,” said Linde CEO Sanjiv Lamba during a recent conference call to discuss the company’s latest financial results. “We have a series of actions underway, and I fully expect sequential improvement into the third quarter.”

Linde officials said Lincare served the company well during and immediately following the COVID-19 pandemic, but since then, labor cost inflation and reimbursement changes have taken their toll on the U.S. home care business.

In addition to the actions it has put in place, Linde officials said they are evaluating the strategic fit of the U.S. home care business within Linde – “in part and as a whole,” Lamba said.

“And I want to make sure that we do that exercise with diligence and determine one way or the other, if this business is going to have a meaningful positive impact on our portfolio,” he said.

During the call, Lamba said operating margins for the Americas business would have been up 20 basis points in the second quarter, excluding the U.S. home care business.

“The gas business is doing well, and the double-digit hard goods sales are a good sign of U.S. manufacturing recovery, though they have a temporary margin impact,” he said. “We are not happy with margins and have aggressive actions underway to attack the issues in the Lincare business, expecting sequential improvement moving forward.”

Linde completed its $4.6 billion acquisition of Lincare in 2012.