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IPG Photonics (IPGP) to Report Q3 Earnings: What to Expect?

Zacks Equity Research

IPG Photonics Corporation IPGP is slated to report third-quarter 2019 results on Oct 29.

Notably, the company beat the Zacks Consensus Estimate in two of the trailing four quarters, the average negative surprise being 0.56%.

Which Way Are Q3 Estimates Treading?

For the third quarter, IPG Photonics expects sales in the range of $325 million to $355 million. The Zacks Consensus Estimate for revenues is currently pegged at $337.45 million, indicating a decline of 5.3% from the year-ago quarter.

Management projected earnings in the range of $1.05-$1.35 per share. The Zacks Consensus Estimate for earnings is pegged at $1.19 per share, suggesting a decline of 36.4% from the year-ago reported figure. Notably, estimates have remained stable in the past 30 days.

Q2 at a Glance

IPG Photonics had reported second-quarter 2019 earnings of $1.34 per share, which declined 39% from the year-ago quarter. Adjusting foreign-exchange related loss of 8 cents, earnings were $1.42 per share. Notably, the Zacks Consensus Estimate was pegged at $1.41.

Revenues of $363.8 million fell 12% on a year-over-year basis, but surpassed the consensus mark of $357 million.

Let’s see how things are shaping up prior to this announcement.
 

IPG Photonics Corporation Price and EPS Surprise

 

IPG Photonics Corporation Price and EPS Surprise

IPG Photonics Corporation price-eps-surprise | IPG Photonics Corporation Quote

Factors to Consider

IPG Photonics’ third-quarter results are likely to reflect the company’s efforts to expand into new end-markets like advanced applications (3D Printing, Cinema, and micro-materials processing), communications and medical, to enhance business prospects.

In fact, development of new medical applications utilizing fiber lasers for urological and dental procedures is likely to have aided adoption of laser-based medical solutions and consequently the third-quarter top line.

Moreover, synergies from acquisition of Genesis are likely to get reflected in IPG Photonics’ top line in the third quarter. Genesis' robotic systems integration capabilities are expected to have aided the company to extend laser processing offerings to industrial, aerospace and transportation end markets. Notably, Genesis contributed $22 million to total revenues in the second quarter.

Additionally, incremental adoption of latest 10 and 6 kilowatt ultra-high power CW lasers is anticipated to have benefited the third-quarter results.

However, IPG Photonics’ dependence on select customers, pricing headwinds on account of stiff competition, is likely to have affected third-quarter performance.

Further, uncertainty in macroeconomic environment, and unfavorable geopolitical factors and higher tariffs amid substantial exposure to China, are likely to have negatively impacted the third-quarter top line.

What Our Model Says

According to the Zacks model, a company has a good chance of beating estimates if it has a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Although IPG Photonics has a Zacks Rank #3, an Earnings ESP of 0.00% makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks you may consider, as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

Advanced Energy Industries, Inc. AEIS has an Earnings ESP of +4.17% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Advanced Micro Devices, Inc. AMD has an Earnings ESP of +6.54% and a Zacks Rank #2. The company is set to report third-quarter 2019 earnings on Oct 29.

GlaxoSmithKline plc GSK has an Earnings ESP of +3.03% and a Zacks Rank #2. The company is scheduled to report third-quarter 2019 earnings on Oct 30.

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