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IPG Photonics Corporation (IPGP - Free Report) delivered first-quarter 2021 earnings of $1.26 per share, compared with 68 cents reported in the year-ago quarter. Notably, favorable foreign-exchange movement benefited 9 cents to the bottom line.
Revenues of $345.6 million increased 39% on a year-over-year basis. IPG Photonics anticipated revenues in the range of $310-$340 million.
The company noted that the results were driven by robust demand in China and North America along with growth in electric vehicle battery production and solar cell manufacturing as well as with soild demand for welding applications.
IPG Photonics Corporation Price, Consensus and EPS Surprise
The Zacks Consensus Estimate for first-quarter earnings and revenues was pegged at $1.07 and $326.4 million, respectively.
Notably, shares of IPG Photonics have rallied 46.8% in the past year compared with the industry’s return of 29.3%.
The company also announced that Valentin P. Gapontsev is stepping down from CEO role with immediate effect. He will be replaced by Eugene A. Scherbakov, who currently serves as chief operating officer of the company.
Revenues by Application
Materials processing (91.8% of total revenues) increased 45% year over year to $317.2 million. The upside can be attributed to higher demand for welding, solar cell manufacturing, cutting and ablation applications.
Revenues from other applications (8.2%) declined 9% year over year to almost $28.3 million, due to reduced revenue from medical which offset revenue growth in advanced applications and telecom.
Revenues by Geography
Sales in United States and other North America (representing 21.2% of total sales) improved 9% year over year to $73.4 million.
Moreover, sales in Germany (7.6%) soared 50.8% from the year-ago quarter’s level to $26.3 million
Sales in other Eastern Europe/CIS (17%) also increased 2.4% from the year-ago quarter’s level to $58.6 million.
Revenues from China (40.5%) were up 104% and came in at $139.8 million. Sales in Japan (3.1%) declined 21% to $10.9 million year over year.
Sales in other Asia and Australia (approximately 9.6%) rallied 45.1% year over year to $33.1 million.
Revenues from rest of the world (1%) soared 63.9% to $3.5 million.
Revenues by Product Group
Sales of high-power CW lasers (49.3% of total revenues) were up 43% from the year-ago quarter’s figure to $170.5 million, primarily due to higher sales of ultra-high power fiber lasers (6 kilowatts of power or greater) as well as pulsed and adjustable mode beam (AMB) lasers.
Management noted that sales of ultra-high power fiber lasers (6 kilowatts of power or greater) represented 55% of all high power CW laser sales.
Medium-power CW laser sales (4.6%) jumped 41.1% year over year to $15.9 million, while Pulsed lasers sales (16%) of $55.4 million increased 74% year over year.
Moreover, QCW lasers sales (4%) climbed 38.4% year over year to $13.7 million.
Also, Laser and Non-Laser system sales (7.8%) of $27.1 million improved 45.5% from the year-ago quarter’s reported figure.
Other revenues (18.2%), which include amplifiers, accessories, service, and parts, came in at $63 million, up 8.1% year over year.
Operating Details
IPG Photonics reported a gross margin of 47.5%, which expanded 620 basis points (bps) on a year-over-year basis. This can be attributed to low-cost production capabilities, higher revenue base and a favorable product mix.
Operating expenses increased 29.4% to $75.2 million. As a percentage of revenues, operating expenses contracted to 21.7% compared with the year-ago quarter’s figure of 23.3%.
Operating margin came in at 25.7% compared with the year-ago quarter’s figure of 18%.
Balance Sheet & Cash Flow
As of Mar 31, 2021, IPG Photonics had $1.445 billion in cash & cash equivalents and short-term investments compared with $1.391 billion as of Dec 31, 2020.
As of Mar 31, 2021, total debt (including current portion) came in at almost $37 million compared with $38 million as of Dec 31, 2020.
The company generated $88 million as cash flow from operations compared with the prior-quarter’s figure of $85 million.
The company repurchased $3 million worth of stock during the first quarter. Capital expenditures came in at $27 million compared with $26 million in the prior quarter.
Upbeat Guidance
IPG Photonics expects the improving macroeconomic environment and recovery in capital spending along with emerging trends like energy efficiency and sustainability, displacement of legacy lasers and increases in electric vehicle battery capacity to drive demand for its laser solutions.
Revenues from the core materials processing market are expected to rise on the back of momentum in higher power products. The company is optimistic about its ability to grow in other applications beyond cutting and welding, which include budding avenues across electric vehicle battery processing, solar cell manufacturing and advanced applications devices used in the medical and micro-processing industry. Moreover, strength in new solutions holds promise.
For second-quarter 2021, IPG Photonics anticipates sales to be $360-$390 million. The Zacks Consensus Estimate is currently pegged at $365.6 million.
Earnings are projected between $1.20 and $1.50 per share. The mid-point of this guidance — $1.35 — is higher than the Zacks Consensus Estimate, which is currently at $1.33 per share.
Zacks Rank & Other Stocks to Consider
Currently, IPG Photonics carries a Zacks Rank #3 (Hold).
Qorvo and CDW are scheduled to report their quarterly results on May 5, while Microchip is slated to announce results on May 6.
Long-term earnings growth rate of Qorvo, CDW and Microchip is pegged at 14%, 13.1% and 15.5%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Image: Bigstock
IPG Photonics (IPGP) Q1 Earnings & Revenues Increase Y/Y
IPG Photonics Corporation (IPGP - Free Report) delivered first-quarter 2021 earnings of $1.26 per share, compared with 68 cents reported in the year-ago quarter. Notably, favorable foreign-exchange movement benefited 9 cents to the bottom line.
Revenues of $345.6 million increased 39% on a year-over-year basis. IPG Photonics anticipated revenues in the range of $310-$340 million.
The company noted that the results were driven by robust demand in China and North America along with growth in electric vehicle battery production and solar cell manufacturing as well as with soild demand for welding applications.
IPG Photonics Corporation Price, Consensus and EPS Surprise
IPG Photonics Corporation price-consensus-eps-surprise-chart | IPG Photonics Corporation Quote
The Zacks Consensus Estimate for first-quarter earnings and revenues was pegged at $1.07 and $326.4 million, respectively.
Notably, shares of IPG Photonics have rallied 46.8% in the past year compared with the industry’s return of 29.3%.
The company also announced that Valentin P. Gapontsev is stepping down from CEO role with immediate effect. He will be replaced by Eugene A. Scherbakov, who currently serves as chief operating officer of the company.
Revenues by Application
Materials processing (91.8% of total revenues) increased 45% year over year to $317.2 million. The upside can be attributed to higher demand for welding, solar cell manufacturing, cutting and ablation applications.
Revenues from other applications (8.2%) declined 9% year over year to almost $28.3 million, due to reduced revenue from medical which offset revenue growth in advanced applications and telecom.
Revenues by Geography
Sales in United States and other North America (representing 21.2% of total sales) improved 9% year over year to $73.4 million.
Moreover, sales in Germany (7.6%) soared 50.8% from the year-ago quarter’s level to $26.3 million
Sales in other Eastern Europe/CIS (17%) also increased 2.4% from the year-ago quarter’s level to $58.6 million.
Revenues from China (40.5%) were up 104% and came in at $139.8 million. Sales in Japan (3.1%) declined 21% to $10.9 million year over year.
Sales in other Asia and Australia (approximately 9.6%) rallied 45.1% year over year to $33.1 million.
Revenues from rest of the world (1%) soared 63.9% to $3.5 million.
Revenues by Product Group
Sales of high-power CW lasers (49.3% of total revenues) were up 43% from the year-ago quarter’s figure to $170.5 million, primarily due to higher sales of ultra-high power fiber lasers (6 kilowatts of power or greater) as well as pulsed and adjustable mode beam (AMB) lasers.
Management noted that sales of ultra-high power fiber lasers (6 kilowatts of power or greater) represented 55% of all high power CW laser sales.
Medium-power CW laser sales (4.6%) jumped 41.1% year over year to $15.9 million, while Pulsed lasers sales (16%) of $55.4 million increased 74% year over year.
Moreover, QCW lasers sales (4%) climbed 38.4% year over year to $13.7 million.
Also, Laser and Non-Laser system sales (7.8%) of $27.1 million improved 45.5% from the year-ago quarter’s reported figure.
Other revenues (18.2%), which include amplifiers, accessories, service, and parts, came in at $63 million, up 8.1% year over year.
Operating Details
IPG Photonics reported a gross margin of 47.5%, which expanded 620 basis points (bps) on a year-over-year basis. This can be attributed to low-cost production capabilities, higher revenue base and a favorable product mix.
Operating expenses increased 29.4% to $75.2 million. As a percentage of revenues, operating expenses contracted to 21.7% compared with the year-ago quarter’s figure of 23.3%.
Operating margin came in at 25.7% compared with the year-ago quarter’s figure of 18%.
Balance Sheet & Cash Flow
As of Mar 31, 2021, IPG Photonics had $1.445 billion in cash & cash equivalents and short-term investments compared with $1.391 billion as of Dec 31, 2020.
As of Mar 31, 2021, total debt (including current portion) came in at almost $37 million compared with $38 million as of Dec 31, 2020.
The company generated $88 million as cash flow from operations compared with the prior-quarter’s figure of $85 million.
The company repurchased $3 million worth of stock during the first quarter. Capital expenditures came in at $27 million compared with $26 million in the prior quarter.
Upbeat Guidance
IPG Photonics expects the improving macroeconomic environment and recovery in capital spending along with emerging trends like energy efficiency and sustainability, displacement of legacy lasers and increases in electric vehicle battery capacity to drive demand for its laser solutions.
Revenues from the core materials processing market are expected to rise on the back of momentum in higher power products. The company is optimistic about its ability to grow in other applications beyond cutting and welding, which include budding avenues across electric vehicle battery processing, solar cell manufacturing and advanced applications devices used in the medical and micro-processing industry. Moreover, strength in new solutions holds promise.
For second-quarter 2021, IPG Photonics anticipates sales to be $360-$390 million. The Zacks Consensus Estimate is currently pegged at $365.6 million.
Earnings are projected between $1.20 and $1.50 per share. The mid-point of this guidance — $1.35 — is higher than the Zacks Consensus Estimate, which is currently at $1.33 per share.
Zacks Rank & Other Stocks to Consider
Currently, IPG Photonics carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector worth consideration are Qorvo (QRVO - Free Report) , CDW Corporation (CDW - Free Report) and Microchip (MCHP - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Qorvo and CDW are scheduled to report their quarterly results on May 5, while Microchip is slated to announce results on May 6.
Long-term earnings growth rate of Qorvo, CDW and Microchip is pegged at 14%, 13.1% and 15.5%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>