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IPG Photonics (IPGP) Q4 Earnings Beat, Revenues Improve Y/Y

IPG Photonics IPGP reported fourth-quarter 2021 earnings of $1.21 per share, which beat the Zacks Consensus Estimate by 0.83% and improved 32% year over year.

Revenues of $364 million increased 8% on a year-over-year basis and surpassed the consensus mark by 4.75%.

The company noted that the results were driven by growth in demand in welding applications across most geographies. Higher revenues in cutting in North America and Europe and emerging products and applications such as cleaning, 3D printing, advanced applications and telecom drove strong revenue growth in the quarter under review. This fully negated the weak demand in cutting applications in China.

Quarterly Details

Materials processing (87% of total revenues) increased 5% year over year. The upside can be attributed to higher demand for welding, marking and 3D printing.

Revenues from other applications increased 41% year over year due to higher medical, advanced applications and telecom sales.

Sales of high-power CW lasers were down 4% year over year. Pulsed and medium-power lasers’ revenues increased, driven by growth in emerging products and applications.

Sales surged 37% in Europe and 30% in North America on a year-over-year basis. Meanwhile, the same decreased 20% in China.

IPG Photonics reported a gross margin of 45.5%, which expanded 190 basis points (bps) on a year-over-year basis.

Operating margin came in at 23.3% compared with the year-ago quarter’s figure of 19.4%.

IPG Photonics Corporation Price, Consensus and EPS Surprise

IPG Photonics Corporation Price, Consensus and EPS Surprise
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 Dec 31, 2021, IPG Photonics had $1.515 billion in cash & cash equivalents and short-term investments compared with $1.519 billion as of Sep 30, 2021.

As of Dec 31, 2021, total debt (including the current portion) came in at almost $34 million compared with $35.1 million as of Sep 30, 2021.

Guidance

For first-quarter 2021, IPG Photonics anticipates sales to be $320-$350 million. Earnings are projected between 85 cents per share and $1.15 per share.

Zacks Rank & Stocks to Consider

IPG Photonics currently carries a Zacks Rank #3 (Hold).

IPGP’s shares have tumbled 42.8% compared with the Zacks Computer and Technology sector’s fall of 2.5% in the past year.

Some better-ranked stocks in the same sector are Analog Devices ADI, Veeco Instruments VECO and Agilent Technologies A.

Analog Devices, Agilent Devices and Veeco Instruments carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Veeco Instruments shares have rallied 24.6% in the past year.

VECO is slated to report fourth-quarter 2021 results on Feb 16.

Agilent Technologies’ shares have surged 5.7% in the past year.

Agilent is scheduled to report first-quarter 2022 results on Feb 22.

Analog shares have fallen 4% compared with the Zacks Computer and Technology sector’s decline of 2.5% in the past year.

ADI is slated to report first-quarter 2021 results on Feb 16.


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