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IPG Photonics (IPGP) to Post Q3 Earnings: What's in the Cards?

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IPG Photonics (IPGP - Free Report) is slated to release its third-quarter 2023 results on Oct 31.

For the third quarter, the company anticipates sales to be $300-$330 million. Earnings are projected between 85 cents per share and $1.15 per share.

For the quarter, the Zacks Consensus Estimate for earnings is pegged at $1.02 per share, unchanged over the past 30 days. The figure indicates a decline of 30.61% from the year-ago quarter.

The consensus mark for revenues stands at $315.41 million, suggesting a decrease of 9.63% from the year-ago quarter.

IPG Photonics’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing the same once, the average negative surprise being 63.15%.

Let’s see how things have shaped up for this announcement.

Factors to Note

IPG Photonics has been suffering from lower materials processing sales, primarily due to weakness in cutting and marking applications.

Our model estimate for Materials Processing revenues is pegged at $284.3 million, indicating a 9% decline on a year-over-year basis.

Sales in flat sheet cutting applications have remained weak, primarily due to global macroeconomic uncertainties and an increased competitive environment in China.

Lower revenues from advanced applications and medical are expected to have hurt top-line growth in the to-be-reported quarter.

In the second quarter of 2023, revenues from China declined 28% year over year. Our model estimates third-quarter 2023 China revenues to be $96.8 million, indicating a 17.9% year-over-year decline.

Our model estimates an 8.7%, 7.3% and 4.8% year-over-year decline in North America, Germany, Other Asia and Australia in third-quarter 2023, respectively.

However, IPG Photonics is expected to have benefited from strong demand for the handheld welder, LightWELD. Moreover, robust demand for cleaning and solar cell manufacturing solutions due to increasing investment in renewable energy and eco-friendly solutions is expected to have benefited top-line growth.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

IPG Photonics has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Itron (ITRI - Free Report) has an Earnings ESP of +23.18% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Itron shares have gained 14% year to date. ITRI is set to report its third-quarter 2023 results on Nov 2.

GoDaddy (GDDY - Free Report) has an Earnings ESP of +14.09% and a Zacks Rank #1.

GoDaddy shares have declined 3.1% year to date. GDDY is set to report its third-quarter 2023 results on Nov 2.

Qorvo (QRVO - Free Report) has an Earnings ESP of +4.46% and a Zacks Rank of 1, at present.

Qorvo shares have declined 4.8% year to date. QRVO is set to report its second-quarter fiscal 2024 results on Nov 1.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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