Cognex ( CGNX Quick Quote CGNX - Free Report) reported second-quarter 2022 non-GAAP earnings of 41 cents per share, which missed the Zacks Consensus Estimate by 2.38% and declined 5% year over year.
Revenues of $274.63 million beat the consensus mark by 0.13%. The top line increased 2% year over year.
The top line and non-GAAP earnings were negatively impacted primarily by losses incurred due to damage by fire at Cognex’s primary contract manufacturer’s factory in Indonesia.
This resulted in loss of large portion of the company’s component inventory and a net non-cash charge of $17.4 million in Q2 which was not covered by insurance.
The top line growth was impacted positively due to strong demand by customers from consumer electronics industry. However revenue from the logistics industry declined heavily both year-on-year and sequentially due to lower spending on automation projects for new fulfillment centers.
Sales surged 20% in Asia and 13% in Europe year over year. Meanwhile, the same declined 16% in America.
Gross margin was 72% in the second quarter of 2022 which declined by 300 bps from the year ago quarter due to increasing costs incurred to procure electronic components through brokers.
RD&E and SG&A margins were 12% and 29%, respectively, in the second quarter of 2022, which is in line with the figures reported in the year-ago quarter.
Non GAAP Operating margin came in at 30%, increasing by 400 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of July 3, 2022 Cognex had $788 million in cash and investments compared with $794 million as of April 3, 2022. The company has no debt.
Cognex generated $94 million in cash from operations in the second quarter of 2022 compared with $50 million in the previous quarter.
For third-quarter 2022, Cognex anticipates revenues to be between $160 million and $180 million. Earnings are projected between $1 per share and $1.30 per share.
Gross margin for Q3-22 is expected to be about 70%, which is below the company’s mid-70% long-term target due to lower expected revenue level and higher inventory purchase cost which includes broker premiums as the company is looking to replenish inventory destroyed by the fire.
Zacks Rank & Stocks to Consider
Cognex currently carries a Zacks Rank #3 (Hold).
Cognex’s shares have tumbled 44.3% compared with the Zacks
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