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IPG Photonics (IPGP - Free Report) reported second-quarter 2022 earnings of $1.38 per share, which beat the Zacks Consensus Estimate by 23.21% and improved 3.8% year over year.
Revenues of $377.02 million increased 1% on a year-over-year basis and surpassed the consensus mark by 3.71%.
The company noted that the results were driven by higher sales in welding, cleaning and medical applications, offset by lower revenues in cutting applications.
The company’s top line was impacted by foreign exchange transaction losses of $18 million. The book-to-bill ratio was lower than 1 in the reported quarter due to moderate demand in Europe.
IPG Photonics Corporation Price, Consensus and EPS Surprise
Materials processing (91% of total revenues) decreased 1% year over year. The downside was due to lower revenues in cutting and solar cell manufacturing applications. However, the company is experiencing rising demand for welding and cleaning applications.
Revenues from other applications increased 29% year over year due to higher sales in medical. However, sales of high-power CW lasers were down 14% year over year due to softer demand in China.
Sales surged 33% in North America, 43% in Japan, and 2% in Europe year over year. Meanwhile, the same declined 14% in China.
IPG Photonics reported a gross margin of 45.7%, which decreased 290 basis points (bps) on a year-over-year basis. The decrease in gross margin was on account of higher inventory reserves, shipping costs and tariffs, and lower manufacturing cost absorption, which was partially offset by the lower cost of products sold.
Operating margin came in at 19%, decreasing by 580 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2022, IPG Photonics had $771.89 million in cash & cash equivalents compared with $642.52 million as of Mar 31, 2022. Short-term investments as of Jun 30, 2022, were $462.86 million compared with $774.16 million as of Mar 31, 2022.
As of June 30, 2022, total debt (including the current portion) was nearly $32 million compared with $33.2 million as of Mar 31, 2021.
Cash flow from operations was $79 million in the second quarter compared with first-quarter 2022’s figure of $16 million.
In second-quarter 2022, IPG photonics returned $233 million through share repurchases.
Guidance
For third-quarter 2022, IPG Photonics anticipates sales to be $350-$380 million. Earnings are projected between $1 per share and $1.30 per share.
Zacks Rank & Stocks to Consider
IPG Photonics currently carries a Zacks Rank #3 (Hold).
IPGP’s shares have tumbled 39.2% compared with the Zacks Computer and Technology sector’s decline of 24.2% in the year-to-date period.
Here are some better-ranked stocks worth considering in the broader sector.
ACLS’ shares have decreased 5.8% in the year-to-date period compared with the Zacks Electronics - Manufacturing Machinery industry’s decline of 25.5%. ACLS is scheduled to report second-quarter 2022 results on Aug 3.
BLNK’s shares have decreased 16.8% in the year-to-date period compared with the Zacks Electronics - Miscellaneous Services industry’s decline of 15.5%. Blink is scheduled to report second-quarter 2022 results on Aug 8.
FSLY’s shares have decreased 65.1% in the year-to-date period compared with the Zacks Internet Software industry’s decline of 49.8%. FSLY is scheduled to report second-quarter 2022 results on Aug 3.
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IPG Photonics (IPGP) Q2 Earnings Beat, Revenues Improve Y/Y
IPG Photonics (IPGP - Free Report) reported second-quarter 2022 earnings of $1.38 per share, which beat the Zacks Consensus Estimate by 23.21% and improved 3.8% year over year.
Revenues of $377.02 million increased 1% on a year-over-year basis and surpassed the consensus mark by 3.71%.
The company noted that the results were driven by higher sales in welding, cleaning and medical applications, offset by lower revenues in cutting applications.
The company’s top line was impacted by foreign exchange transaction losses of $18 million. The book-to-bill ratio was lower than 1 in the reported quarter due to moderate demand in Europe.
IPG Photonics Corporation Price, Consensus and EPS Surprise
IPG Photonics Corporation price-consensus-eps-surprise-chart | IPG Photonics Corporation Quote
Quarterly Details
Materials processing (91% of total revenues) decreased 1% year over year. The downside was due to lower revenues in cutting and solar cell manufacturing applications. However, the company is experiencing rising demand for welding and cleaning applications.
Revenues from other applications increased 29% year over year due to higher sales in medical. However, sales of high-power CW lasers were down 14% year over year due to softer demand in China.
Sales surged 33% in North America, 43% in Japan, and 2% in Europe year over year. Meanwhile, the same declined 14% in China.
IPG Photonics reported a gross margin of 45.7%, which decreased 290 basis points (bps) on a year-over-year basis. The decrease in gross margin was on account of higher inventory reserves, shipping costs and tariffs, and lower manufacturing cost absorption, which was partially offset by the lower cost of products sold.
Operating margin came in at 19%, decreasing by 580 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2022, IPG Photonics had $771.89 million in cash & cash equivalents compared with $642.52 million as of Mar 31, 2022. Short-term investments as of Jun 30, 2022, were $462.86 million compared with $774.16 million as of Mar 31, 2022.
As of June 30, 2022, total debt (including the current portion) was nearly $32 million compared with $33.2 million as of Mar 31, 2021.
Cash flow from operations was $79 million in the second quarter compared with first-quarter 2022’s figure of $16 million.
In second-quarter 2022, IPG photonics returned $233 million through share repurchases.
Guidance
For third-quarter 2022, IPG Photonics anticipates sales to be $350-$380 million. Earnings are projected between $1 per share and $1.30 per share.
Zacks Rank & Stocks to Consider
IPG Photonics currently carries a Zacks Rank #3 (Hold).
IPGP’s shares have tumbled 39.2% compared with the Zacks Computer and Technology sector’s decline of 24.2% in the year-to-date period.
Here are some better-ranked stocks worth considering in the broader sector.
Axcelis Technologies (ACLS - Free Report) sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ACLS’ shares have decreased 5.8% in the year-to-date period compared with the Zacks Electronics - Manufacturing Machinery industry’s decline of 25.5%. ACLS is scheduled to report second-quarter 2022 results on Aug 3.
Blink Charging (BLNK - Free Report) carries a Zacks Rank #2 (Buy).
BLNK’s shares have decreased 16.8% in the year-to-date period compared with the Zacks Electronics - Miscellaneous Services industry’s decline of 15.5%. Blink is scheduled to report second-quarter 2022 results on Aug 8.
Fastly (FSLY - Free Report) carries a Zacks Rank #2 (Buy).
FSLY’s shares have decreased 65.1% in the year-to-date period compared with the Zacks Internet Software industry’s decline of 49.8%. FSLY is scheduled to report second-quarter 2022 results on Aug 3.