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IPG Photonics (IPGP) to Post Q2 Earnings: What to Expect?

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IPG Photonics (IPGP - Free Report) is slated to release second-quarter fiscal 2022 results on Aug 2.

For the second quarter, IPG Photonics anticipates sales to be $355-$385 million. Earnings are projected between 95 cents per share and $1.25 per share.

For the quarter under review, the Zacks Consensus Estimate for earnings is pegged at 1.12 cents per share, unchanged over the past 30 days. The figure indicates a decline of 15.79% from the year-ago quarter.

The consensus mark for revenues stands at $363.53 million, which suggests a decrease of 2.19% from the year-ago quarter.

IPG Photonics’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 8.57%.

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 to Note

IPG Photonics’ second-quarter results are likely to reflect the ongoing supply chain constraints induced by the re-emergence of the COVID-19 outbreak in Shanghai, China and trade restrictions and economic sanctions on Russia in general, which have impacted the company’s operations in the country.

Amid rising supply chain constraints, IPG Photonics is expected to have benefited from the rise of sales outside of China, which contributed 65% to total revenues in the last reported quarter. This is expected to have helped the company achieve a better geographic balance in its business.

The global macro trends, including factory miniaturization, renewable energy and energy efficiency and EV, might have favored IPG Photonics’ second-quarter performance. The megatrends are likely to have increased sales in welding, marking, systems, cleaning, 3D printing, semiconductor and medical applications.

Automakers and suppliers have been investing heavily in e-mobility vehicles globally. Rising demand for its AMB lasers and foil cutting applications used in EV battery manufacturing might have favored IPGP’s performance in the quarter to be reported.

IPGP is likely to have gained from the automation megatrend as manufacturers are increasing their investments in automation to address shortages of labor and wage inflation. This is expected to have increased demand for the company’s LightWELD lasers.

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 #3 currently. 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:

Aspen Technology (AZPN - Free Report) has an Earnings ESP of +1.40% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aspen’s shares have returned 19% in the year-to-date period against the Zacks Internet - Software industry’s decline of 49.7%.

Arrow Electronics (ARW - Free Report) has an Earnings ESP of +2.44% and a Zacks Rank #1

ARW’s shares have fallen 8.3% in the year-to-date period compared with the Zacks Electronics - Parts Distribution industry’s decline of 7.5%.

Ballard Power Systems (BLDP - Free Report) has an Earnings ESP of +2.04% and a Zacks Rank #3.

Ballard’s shares have fallen 45.75% in the year-to-date period compared with the Zacks Electronics - Miscellaneous Components industry’s decline of 23.4%.