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What's in the Offing for IPG Photonics' (IPGP) Q3 Earnings?

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IPG Photonics (IPGP - Free Report) is scheduled to report third-quarter 2021 results on Nov 2.

For the quarter, the company expects revenues between $350 million and $380 million. Earnings are expected in the range of $1.10-$1.40 per share.

For the third quarter, the Zacks Consensus Estimate for earnings is pegged at $1.29 per share, having moved down by a penny in the past 30 days. The consensus mark for revenues is pinned at $368.9 million, which suggests an improvement of 15.8% from the year-ago quarter’s reported figure.

IPG Photonics’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, and missed in the other, the average earnings surprise being 18.5%.

Let’s see how things have shaped up for IPG Photonics prior to this announcement.

IPG Photonics Corporation Price and EPS Surprise IPG Photonics Corporation Price and EPS Surprise

IPG Photonics Corporation price-eps-surprise | IPG Photonics Corporation Quote

Factors at Play

IPG Photonics’ third-quarter performance is likely to have benefited from an improving macroeconomic environment and the recovery in capital spending. Also, emerging trends like energy efficiency and sustainability, displacement of legacy lasers and increases in the electric vehicle battery capacity are anticipated to have boosted demand for the company’s laser solutions during the to be reported quarter.

Continued momentum in higher power products across the core materials processing domain and strength in new solutions are expected to have bolstered the top line. Strength in fiber & diode lasers, fiber amplifiers and transceivers portfolios are also expected to have aided revenues in the third quarter.

IPG Photonics’ efforts to expand into new end-markets like advanced applications (3D Printing and micro-materials processing), renewable energy, electric vehicle battery processing and systems, ultra-high-power cutting, and medical are likely to have contributed to the to-be-reported quarter’s performance.

The development of new medical applications utilizing fiber lasers for the urological and dental procedures is anticipated to have aided the adoption of laser-based medical solutions. This, in turn, is likely to have driven the third-quarter performance.

Nonetheless, the stiff pricing competition is likely to have put pressure on IPG Photonics’ third-quarter bottom-line performance. Moreover, increasing lead time for certain components and inflationary pressure on input costs are expected to have clipped its margins during the quarter under review.

What Our Model Says

Our proven model does not predict an earnings beat for IPG Photonics this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

IPG Photonics currently carries a Zacks Rank of 4 and has an Earnings ESP of -0.78%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release:

HP (HPQ - Free Report) has an Earnings ESP of +1.89% and currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Apple (AAPL - Free Report) has an Earnings ESP of +5.07% and carries a Zacks Rank #2, at present.

Applied Materials (AMAT - Free Report) has an Earnings ESP of +0.52% and holds a Zacks Rank of 2, currently.

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