IPG Photonics ( IPGP Quick Quote IPGP - Free Report) reported first-quarter 2022 earnings of $1.31 per share, which beat the Zacks Consensus Estimate by 32.32% and improved 4% year over year. Revenues of $370 million increased 7% on a year-over-year basis and surpassed the consensus mark by 10.94%. The company noted that the results were driven by growth in demand in EV battery manufacturing, handheld welding and medical applications. The company’s book-to-bill ratio was greater than 1 in the reported quarter. Quarterly Details
Materials processing (92% of total revenues) increased 7% year over year. The upside can be attributed to higher demand for welding, marking and 3D printing. However, sales were partially offset by lower revenues in cutting and solar cell manufacturing process.
Revenues from other applications increased 9% year over year due to higher sales in medical. However, it was offset by weaker sales in advanced applications and telecom. Sales of high-power CW lasers were down 2% year over year due to softer demand in China. Pulsed and medium-power lasers’ revenues increased, driven by growth in emerging products and applications.
Sales surged 27% in Europe, 5% in North America and 18% in Japan on a year-over-year basis. Meanwhile, the same declined 7% in China.
IPG Photonics reported a gross margin of 46.4%, which decreased 100 basis points (bps) on a year-over-year basis. Operating margin came in at 25.2%, decreasing by 50 bps from the year-ago quarter. Balance Sheet & Cash Flow
As of Mar 31, 2022, IPG Photonics had $642.5 million in cash & cash equivalents compared with $709 million as of Dec 31, 2021. Short-term investments as of Mar 31, 2022 were of $774.2 million compared with $805.4 million as of Dec 31, 2021.
As of Mar 31, 2022, total debt (including the current portion) was nearly $33.2 million compared with $34 million as of Dec 31, 2021. Cash flow from operations was $16 million in the first quarter compared with fourth-quarter 2021’s figure of $85 million. Guidance
For second-quarter 2022, IPG Photonics anticipates sales to be $355-$385 million. Earnings are projected between 95 cents per share and $1.25 per share.
Zacks Rank & Stocks to Consider
IPG Photonics currently carries a Zacks Rank #5 (Strong Sell).
IPGP’s shares have tumbled 36.7% compared with the Zacks Computer and Technology sector’s decline of 21.8% in the year-to-date period. Here are some better-ranked stocks worth considering in the broader sector. Analog Devices ( ADI Quick Quote ADI - Free Report) carries a Zacks Rank #2 (Buy). You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here ADI shares have fallen 11% in the year-to-date period. ADI is expected to report second-quarter 2022 earnings on May 18. Cisco Systems ( CSCO Quick Quote CSCO - Free Report) carries a Zacks Rank of 2. Cisco shares have declined 21.7% in the year-to-date period. CSCO is expected to report third-quarter 2022 earnings on May 18. BWX Technologies ( BWXT Quick Quote BWXT - Free Report) carries a Zacks Rank of 2. BWX shares have returned 6.3% in the year-to-date period. BWX is anticipated to report first-quarter 2022 earnings on May 9.