IPG Photonics Still On Top Of A Rising Mountain
Stephen Simpson, CFA
Stephen Simpson, CFA
At IPG Photonics, Strong Performance Backs Aggressive Expectations
Stephen Simpson, CFA
Stephen Simpson, CFA
IPG Photonics: Fiber Laser Leader Poised For Fast Growth
Smart Value Investor
Smart Value Investor
Thu, Apr. 28, 12:46 PM
Thu, Apr. 28, 11:28 AM
- Laser maker IPG Photonics (NASDAQ:IPGP) is cratering, -14.5% in the wake of a Q1 earnings report where it missed on top and bottom lines as foreign exchange turned against it, and guided below consensus for Q2.
- Revenue grew 4%, but operating income fell 15% to $70M and net income slipped 14%. The firm noted $0.07/share in forex losses, vs. year-ago results that featured an $0.11 gain in those terms.
- The company forecasts Q2 revenues of $235M-$250M (below an expected $253.5M) and EPS of $1.10-$1.25 vs. analyst expectations for $1.26. "We continue to see large opportunities to expand our business through both existing and new OEMs and end-users as we develop innovative products to address applications beyond our core markets," says CEO Valentin Gapontsev.
- Materials processing sales were up 3% as cutting applications were partly offset by declines in automotive welding, marking and engraving.
- Press Release
Thu, Apr. 28, 8:01 AM
Wed, Apr. 27, 5:30 PM
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Wed, Mar. 16, 4:54 PM
- Coherent (NASDAQ:COHR) is acquiring industrial laser peer Rofin-Sinar (NASDAQ:RSTI) for $942M, or $32.50/share, in cash. The price represents a 42% premium to Rofin's Wednesday close.
- The deal is expected to close in 6-9 months, provided shareholders and regulators approve. For reference, Coherent closed today with a $2.06B market cap.
- Coherent plans to finance the purchase via existing cash and committed debt financing from Barclays. CEO John Ambroseo: "The combination of Coherent and ROFIN represents a unique opportunity to strengthen Coherent's position in materials processing. The addition of ROFIN's complementary portfolio will build on Coherent's capabilities as a world leader in laser and photonics-based technology and solutions and create meaningful value for our stockholders." Rofin CEO Thomas Merk declares the two companies to be "highly complementary both technologically and geographically."
- The deal is expected to be accretive to EPS in its first full year after closing, and produce $30M/year in synergies within 18-24 months of closing. It could stoke M&A hopes for peers IPG Photonics (NASDAQ:IPGP), Newport (NASDAQ:NEWP), and GSI Group (NASDAQ:GSIG).
- COHR and RSTI appear to be halted. CC at 5PM ET (webcast).
- Update (5:43PM ET): After coming off a halt, Rofin-Sinar is up 44% after hours to $33.00. The price suggests some investors are betting on a higher bid.
Fri, Feb. 12, 9:50 AM
- Though IPG Photonics (IPGP -7.1%) beat Q4 EPS estimates and posted in-line revenue, the company is guiding for Q1 revenue of $200M-$215M and EPS of $0.88-$1.03, below a consensus of $225.8M and $1.09.
- The industrial laser maker is still "targeting double-digit growth" for 2016. The 2016 revenue growth consensus is at 12.6%.
- Top-line performance: IPG's core materials processing product sales rose 9% Y/Y in Q4, with strong welding/cutting application growth offsetting lower sales for marking/engraving applications. Sales for other applications fell 11%, with advanced applications weakness offsetting medical/telecom strength.
China and Japan delivered double-digit growth, and Northern and Western Europe "more moderate growth." Sales fell in Russia and Turkey. CEO Valentin Gapontsev: "We expect continued strong growth for some of our recently introduced products including the QCW lasers, high power pulsed lasers as well as the tri-focal brazing laser. The growth will be enhanced by our rich product pipeline. New product introductions for 2016 include new industrial laser systems, laser projection systems, ultra-fast pulsed, UV and mid-IR lasers."
- Financials: Gross margin fell 10 bps Q/Q and 30 bps Y/Y to 54.6%. Op. margin was flat Q/Q and down 30 bps Y/Y to 37.1%. GAAP operating expenses rose 13% Y/Y to $39M (compares with 8% revenue growth). IPG ended Q4 with $689.1M in cash and $20M in debt.
- IPG's Q4 results, earnings release
Fri, Feb. 12, 8:01 AM
Thu, Feb. 11, 5:30 PM
Tue, Feb. 2, 1:17 PM
- Longbow Research's Joe Wittine has downgraded Rofin-Sinar (RSTI -3.6%) to Neutral. He cites a distracting proxy fight activist SilverArrow Capital has nominated three board candidates for election at Rofin's 2016 annual meeting - as well as macro uncertainty and a "competitive race" to be second in the high-power fiber laser market behind IPG Photonics (IPGP -0.8%).
- Rofin is selling of four days after rallying (along with IPG and others) after industrial laser peer reported major OLED-related laser bookings; the Nasdaq is down 1.8%. The company's FQ1 results arrive on Thursday; IPG reports on Feb. 12.
Fri, Jan. 29, 12:39 PM
- Coherent (COHR +20.5%) missed FQ1 sales estimates (while beating on EPS) and guided on its earnings call (transcript) for FQ2 revenue of $195M-$200M, below a $208.7M consensus.
- However, the industrial laser maker also reported FQ1 bookings totaled $273M, up 32.9% Q/Q and 68% Y/Y, and good for a 1.43 book-to-bill. Moreover, a fresh bookings record is forecast for FQ2, and orders are expected to remain strong in the second half of FY16.
- CEO John Ambroseo attributed the numbers to strong OLED manufacturing-related orders for Coherent's Linebeam systems. "The first wave of orders for large format Linebeam systems to be used in OLED production accounted for the bookings increase. The second wave has already arrived in the current quarter with an order well in excess of $150 million. There are a significant number of orders pending for the balance of the second quarter and for the remainder of fiscal 2016 ... We can tell you that deliveries begin in the June quarter and run through calendar 2017."
- The disclosure comes shortly after LG Display announced new investments to ramp OLED TV panel production, and amid reports Apple plans to use OLEDs in future iPhones (one report indicated a 2018 ETA).
- OLED materials/IP provider Universal Display (OLED +8.6%) is up strongly. Coherent peers Rofin-Sinar (RSTI +4.3%), IPG Photonics (IPGP +2.6%), and Newport (NEWP +3.5%) are also doing well. The Nasdaq is up 1.5%.
- Coherent's FQ1 results, earnings release
Oct. 27, 2015, 12:07 PM
- With shares down 27% from their April peak going into earnings (thanks in large part to China-related fears), IPG Photonics (NASDAQ:IPGP) is rallying after posting mixed Q3 results (revenue beat, EPS missed) and issuing light guidance. The industrial laser maker expects Q4 revenue of $215M-$230M and EPS of $1.00-$1.15 vs. a consensus of $234.6M and $1.15.
- Business performance: Materials processing laser sales rose 16% Y/Y in Q3, a slowdown from Q2's 22%. However, sales to other markets rose 168% with the help of strong telecom and advanced applications demand, a big improvement from Q2's 54%. "Strong growth" was seen in North America, Europe, and China; sales fell in Japan and Korea..
- Financials: Gross margin was flat Q/Q and up 10 bps Y/Y to 54.7%. However, op. margin fell 210 bps Y/Y to 36.8% (hurt EPS) thanks to a $5.1M forex loss (compares with a $3.6M year-ago gain). Not counting forex gains/losses, GAAP operating expenses rose 10% Y/Y to $38.6M. IPG ended Q3 with $651M in cash, and $20M in debt.
- Q3 results, PR
Oct. 27, 2015, 8:05 AM
- IPG Photonics (NASDAQ:IPGP): Q3 EPS of $1.18 misses by $0.03.
- Revenue of $243.5M (+22.0% Y/Y) beats by $2.36M.
- Shares -5% PM.
Oct. 26, 2015, 5:30 PM
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Jul. 28, 2015, 9:19 AM
- Along with beating Q2 estimates, IPG Photonics (NASDAQ:IPGP) is guiding for Q3 revenue of $235M-$250M and EPS of $1.15-$1.30, almost entirely above a consensus of $230.9M and $1.15.
- Laser sales: Revenue from the company's core materials processing industrial laser market rose 21% Y/Y in Q2, and sales from "other applications" (telecom, medical, advanced applications) rose 54%. High-power fiber laser sales rose 27%, and "healthy growth" was seen for medium-power, low-power, and QCW lasers. Geographically, Asia was the strongest market.
- Financials: Gross margin rose 50 bps Q/Q and Y/Y to 54.7%. Operating expenses rose 16% Y/Y to $41.3M (includes a $3.2M forex loss). IPG ended Q2 with $571.5M in cash, and $22.3M in debt.
- Shares have jumped to $87.50 premarket.
- Q2 results, PR
Jul. 28, 2015, 8:01 AM
- IPG Photonics (NASDAQ:IPGP): Q2 EPS of $1.15 beats by $0.04.
- Revenue of $235.1M (+22.3% Y/Y) beats by $13.06M.
Jul. 27, 2015, 5:30 PM
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IPG Photonics Corp. develops and manufactures a broad line of fiber lasers, fiber amplifiers and diode lasers that are used for diverse applications, primarily in materials processing, advanced technologies, telecommunications and medical applications. The company sells its products globally to... More
Industry: Semiconductor - Integrated Circuits
Country: United States
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