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IPG Photonics (IPGP - Free Report) reported third-quarter 2022 earnings of $1.47 per share, which beat the Zacks Consensus Estimate by 25.64% and increased 5% year over year.
Revenues of $349 million decreased 8% on a year-over-year basis and missed the consensus mark by 3.40%.
The company noted that forex challenges primarily due to the U.S. dollar reduced revenues by approximately $26 million or 7% from the year-ago period.
Quarterly Details
Materials processing (90% of total revenues) decreased 10% year over year. The downside was due to lower revenues in cutting applications in China and Europe. However, the company is experiencing rising demand for welding and cleaning and solar cell applications.
Revenues from other applications increased 10% 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 for high-cutting applications.
Sales rose 1% in North America but decreased 21% in Japan, 13% in Europe and 14% in China year over year.
IPG Photonics reported a gross margin of 43.1%, which decreased 590 basis points (bps) on a year-over-year basis. The decrease 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 26.7%, decreasing 20 bps from the year-ago quarter.
IPG Photonics Corporation Price, Consensus and EPS Surprise
As of Sep 30, 2022, IPG Photonics had $869.27 million in cash & cash equivalents compared with $771.89 million as of Jun 30, 2022. Short-term investments as of Sep 30, 2022, were $365.41 million compared with $462.86 million as of Jun 30, 2022.
As of Sep 30, 2022, the current portion of long-term debt was nearly $16.39 million compared with $32.2 million as of Jun 30, 2022.
Cash flow from operations was $171.02 million in the third quarter compared with the second-quarter 2022 figure of $95.16 million.
Guidance
For fourth-quarter 2022, IPG Photonics anticipates sales to be $300-$330 million. Earnings are projected between 70 cents and $1 per share.
Zacks Rank & Stocks to Consider
IPG Photonics currently carries a Zacks Rank #3 (Hold).
IPGP’s shares have tumbled 50.3% compared with the Zacks Computer and Technology sector’s decline of 34.5% in the year-to-date period.
Here are some top-ranked stocks worth considering in the broader sector.
BLZE shares have lost 29.6% in the year-to-date period compared with the Zacks Internet - Software industry’s decline of 5.3%.
Tencent Music Entertainment Group (TME - Free Report) is also a Zacks Rank #2 stock. The company is set to report third-quarter 2022 earnings on Nov 15.
TME shares have lost 44.1% in the year-to-date period compared with the Zacks Internet - Content industry’s decline of 35.8%.
ACM Research (ACMR - Free Report) has a Zacks Rank #2. The company is set to report third-quarter 2022 earnings on Nov 4.
ACMR shares have lost 77.2% in the year-to-date period compared with the Zacks Internet - Content industry’s decline of 62.2%.
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IPG Photonics (IPGP) Q3 Earnings Beat, Revenues Decline Y/Y
IPG Photonics (IPGP - Free Report) reported third-quarter 2022 earnings of $1.47 per share, which beat the Zacks Consensus Estimate by 25.64% and increased 5% year over year.
Revenues of $349 million decreased 8% on a year-over-year basis and missed the consensus mark by 3.40%.
The company noted that forex challenges primarily due to the U.S. dollar reduced revenues by approximately $26 million or 7% from the year-ago period.
Quarterly Details
Materials processing (90% of total revenues) decreased 10% year over year. The downside was due to lower revenues in cutting applications in China and Europe. However, the company is experiencing rising demand for welding and cleaning and solar cell applications.
Revenues from other applications increased 10% 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 for high-cutting applications.
Sales rose 1% in North America but decreased 21% in Japan, 13% in Europe and 14% in China year over year.
IPG Photonics reported a gross margin of 43.1%, which decreased 590 basis points (bps) on a year-over-year basis. The decrease 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 26.7%, decreasing 20 bps from the year-ago quarter.
IPG Photonics Corporation Price, Consensus and EPS Surprise
IPG Photonics Corporation price-consensus-eps-surprise-chart | IPG Photonics Corporation Quote
Balance Sheet & Cash Flow
As of Sep 30, 2022, IPG Photonics had $869.27 million in cash & cash equivalents compared with $771.89 million as of Jun 30, 2022. Short-term investments as of Sep 30, 2022, were $365.41 million compared with $462.86 million as of Jun 30, 2022.
As of Sep 30, 2022, the current portion of long-term debt was nearly $16.39 million compared with $32.2 million as of Jun 30, 2022.
Cash flow from operations was $171.02 million in the third quarter compared with the second-quarter 2022 figure of $95.16 million.
Guidance
For fourth-quarter 2022, IPG Photonics anticipates sales to be $300-$330 million. Earnings are projected between 70 cents and $1 per share.
Zacks Rank & Stocks to Consider
IPG Photonics currently carries a Zacks Rank #3 (Hold).
IPGP’s shares have tumbled 50.3% compared with the Zacks Computer and Technology sector’s decline of 34.5% in the year-to-date period.
Here are some top-ranked stocks worth considering in the broader sector.
Backblaze (BLZE - Free Report) currently has an Earnings ESP of +7.41% and a Zacks Rank #2. The company is set to report its third quarter 2022 earnings on Nov 9. You can see the complete list of today’s Zacks #1 Rank stocks here.
BLZE shares have lost 29.6% in the year-to-date period compared with the Zacks Internet - Software industry’s decline of 5.3%.
Tencent Music Entertainment Group (TME - Free Report) is also a Zacks Rank #2 stock. The company is set to report third-quarter 2022 earnings on Nov 15.
TME shares have lost 44.1% in the year-to-date period compared with the Zacks Internet - Content industry’s decline of 35.8%.
ACM Research (ACMR - Free Report) has a Zacks Rank #2. The company is set to report third-quarter 2022 earnings on Nov 4.
ACMR shares have lost 77.2% in the year-to-date period compared with the Zacks Internet - Content industry’s decline of 62.2%.