Linamar’s Diversified Engine Drives Record Quarter, New Frontiers in Defense and Robotics
data centers are fast becoming a growth engine for Linamar, and the second quarter proved it. The company reported record sales of $3.1 billion and normalized EPS up 9.6%, driven by a standout Mobility performance and a surprising surge in access equipment volumes. While tariffs continue to pressure the Industrial segment, management’s narrative has shifted from defense to offense: onshoring wins, distressed acquisitions, and bold moves into defense and robotics.
Skyjack: Riding the Data Center Wave
The most striking turnaround is in Skyjack, the access equipment division. Volumes were up 46% in the quarter and 53% year-to-date, with growth “broad-based across all major regions and product categories,” according to CEO Jim Jarrell. The industry outlook has flipped from a forecasted decline to nearly 14% growth for 2026, largely due to demand from data centers, infrastructure, and rental fleet expansion. Jarrell noted, “our backlog is probably almost double to what it was last year this time,” and order intake is similarly elevated. This is not just a cyclical bounce; it reflects Skyjack’s technology edge in compact electric scissors and new boom products that are winning share in North America and Europe.
Tariffs: A Thorn, Not a Crisis
Tariffs remain the key headwind, but management is careful to frame them as contained. More than 90% of sales are not impacted, and the new Section 232 scheme hits only select Industrial products. Executive Chair Linda Hasenfratz emphasized, “Q2 should be the peak dollar-wise on the tariff side,” and the full-year impact on operating earnings is in single digits. The company is actively pursuing mitigation—HS code reclassification, supply chain rebalancing, and customer negotiations—while also benefiting from the onshoring trend. “They don't need to onshore from Canada. We're already onshore. Like we're inside North America and under USMCA, which is still in full force, there is zero tariff on auto parts.” — Linda Hasenfratz, Executive Chair · 2026-08-12 This has translated into record new business wins: Canadian plants have already booked 90% of last year’s full-year value, and U.S. wins have matched all of 2025’s total.
New Frontiers: Defense & Robotics
Perhaps the most exciting development is Linamar’s pivot toward new verticals. Jarrell disclosed an MOU with a “large international prime” in defense, building on the company’s capabilities in precision machining and automation. On robotics, Linamar has signed an LOI to manufacture cobots in North America and a third LOI for humanoid robots. This aligns with the company’s long-standing strategy of new business wins beyond traditional automotive. The move into defense and robotics is a natural extension of its manufacturing DNA, but it also opens new end markets with potentially higher margins and longer cycles.
Capital Allocation and Outlook
Linamar’s balance sheet remains a competitive weapon. Net debt-to-EBITDA is just 0.52x, free cash flow generation is strong, and the company raised its dividend by 10% while continuing buybacks. Management sees ample dry powder for further distressed acquisitions, particularly in Europe. The full-year outlook calls for double-digit sales growth and normalized EPS growth, with a modest margin contraction due to tariffs.
We still have more than 90% of our sales this year not impacted by tariffs at all and are not letting the tariffs that do impact impede our promise to grow top and bottom line growth again this year.
The quarter underscores Linamar’s resilience: when one cycle dips, another accelerates. The real story is diversification paying off—not just between Mobility and Industrial, but across new growth vectors like data centers, defense, and robotics. With record order books and a clear strategy, Linamar is not just managing through volatility; it’s capitalizing on it.