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IPG Photonics (IPGP) Q2 Earnings & Revenues Increase Y/Y

IPG Photonics IPGP delivered second-quarter 2021 earnings of $1.29 per share, up 81.7% year over year. Unfavorable forex movement hurt the bottom line by four cents.

Revenues of $371.7 million increased 25.4% on a year-over-year basis.

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 solid demand for welding applications.

The Zacks Consensus Estimate for second-quarter earnings and revenues was pegged at $1.39 per share and $372 million, respectively.

 

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Quarterly Details

Materials processing (93% of total revenues) increased 27% year over year to $317.2 million. The upside can be attributed to higher demand for welding, solar cell manufacturing, cutting and additive applications.

Revenues from other applications (7%) increased 5.3% year over year to $26 million, due to higher sales in medical and advanced applications.

United States and other North America sales (representing 17.8% of total sales) improved 22.7% year over year to $66.1 million.

Germany sales (5.9%) increased 23.3% from the year-ago quarter’s level to $21.7 million

Eastern Europe/CIS sales (20%) surged 59.7% from the year-ago quarter’s level to $74.3 million.

China revenues (42.8%) were up 9.5% and came in at $159.1 million. Sales in Japan (2.8%) declined 29.6% year over year to $10.3 million.

Sales in other Asia and Australia (approximately 10.1%) rallied 123.1% year over year to $37.7 million.

Revenues from rest of the world (0.6%) soared 52.3% to $2.4 million.

Sales of high-power CW lasers (51% of total revenues) were up 20% year over year. Ultra-high-power fiber lasers (6 kilowatts of power or greater) represented 51% 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.

Second-quarter sales benefited from strong growth in adjustable mode beam and pulsed lasers.

IPG Photonics reported a gross margin of 48.6%, which expanded 250 basis points (bps) on a year-over-year basis.

Operating margin came in at 24.8% compared with the year-ago quarter’s figure of 15.9%.

Balance Sheet & Cash Flow

As of Jun 30, 2021, IPG Photonics had $1.497 billion in cash & cash equivalents and short-term investments compared with $1.445 billion as of Mar 31, 2021.

As of Jun 30, 2021, total debt (including current portion) came in at almost $36.1 million compared with $37 million as of Mar 31, 2021.

Guidance

For third-quarter 2021, IPG Photonics anticipates sales to be $350-$380 million. Earnings are projected between $1.10 and $1.40 per share.

Zacks Rank & Stocks to Consider

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

Better-ranked stocks in the broader technology sector include Avnet AVT, CyberArk Software CYBR and Airbnb ABNB. While Avnet sports a Zacks Rank #1 (Strong Buy), both CyberArk and Airbnb carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Avnet is set to report its earnings results on Aug 11. Both CyberArk and Airbnb will report the same on Aug 12.


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