Linamar Corp Posts 6.6% Per-Share Earnings Growth Despite Revenue Decline

Linamar is a major supplier to automakers in North America, so it’s vulnerable to new tariffs on imports of completed vehicles. However, virtually all of the company’s products comply with the current USMCA (U.S.-Mexico-Canada) trade agreement. That should let it avoid direct U.S. tariffs.

Linamar’s balanced portfolio strategy focusing on high-quality businesses will also help it cope with the current trade disruptions.

The stock’s valuation at just 6.8 times the forward earnings forecast represents very strong value given the company’s growth prospects and financial strength.

LINAMAR CORP (Toronto symbol LNR; www.linamar.com) makes a variety of automotive parts. The company also makes self-propelled, scissor-type work platforms under the Skyjack brand, and agricultural harvesting equipment.

In the three months ended March 31, 2025, Linamar’s revenue fell 7.0%, to $2.53 billion from $2.72 billion a year earlier. That missed the consensus forecast of $2.58 billion.

Sales of automotive equipment (75% of the total) declined 4.7% on slowing auto production in the U.S. and Europe. Sales of industrial products (25%) also fell 13.1% on lower demand for Skyjack and agricultural equipment.

But if you factor out foreign exchange gains, earnings in the quarter rose 4.8%, to $167.2 million from $159.6 million. Linamar spent $53.5 million on share buybacks in the quarter, which is why earnings per share gained 6.6%, to $2.76 from $2.59. That beat the consensus estimate of $2.44.

Linamar can withstand Trump’s tariffsLinamar’s auto parts currently comply with the U.S.-Mexico-Canada trade agreement, which has let it avoid new U.S. tariffs. Moreover, Linamar’s industrial products operations in Canada and Europe mainly supply domestic markets, so U.S. tariffs have had little impact.

As for U.S. tariffs on steel and aluminum imports, the company’s contracts with its customers let it adjust the terms for changing prices for those metals. That cuts its risk.

The stock now trades at just 6.8 times Linamar’s projected 2025 earnings of $9.91 a share. The company has also raised your quarterly dividend by 16.0%. Starting with the June 2025 payment, investors began receiving $0.29 a share instead of $0.25. The new annual rate of $1.16 yields 1.7%.

Recommendation in The Successful Investor: Linamar Corp. is a buy.

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LINAMAR CORP

Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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