OXFORD, Mass., Nov. 1, 2010 — Fiber laser maker IPG Photonics Corp. reported Monday that revenue surged for the third quarter of 2010 to nearly $80 million, up 74 percent year-over-year and 19 percent from the second quarter, driven by strong demand for pulsed and high-power lasers. The company also announced it will sell a 12.5 percent stake in its Russia-based subsidiary, NTO IRE-Polus, to the Russian Corporation of Nanotechnologies (Rusnano).
Earnings for the third quarter of 2010 were 28 cents a share, up from 5 cents a year ago and 22 cents last quarter. Total revenue for the quarter was $79.8 million, up 74 percent over the $45.8 million generated in the third quarter of 2009. Net income for the quarter increased nearly six times over 2009's $2.3 million, to $13.2 million.
“An 88 percent increase in pulsed laser sales, the best selling product in the quarter, was driven by strong demand for marking/engraving, and an 83 percent increase in high-power laser sales, the second-best selling product line in the quarter, benefited from the increase in the cutting OEMs and welding demand,” said Dr. Valentin Gapontsev, IPG Photonics CEO.
He added that telecommunication sales increased 160 percent year-over-year, due to demand in Russia and the US. Medical sales were down, primarily due to lower sales by its large US medical OEM customer. Sales for advanced applications were also down, 18 percent year-over-year, due to strong European sales in the third quarter of 2009.
"Geographically, we experienced robust growth in all major regions as the general economic climate improved," Gapontsev said.
IPG also announced today it will sell a stake in its subsidiary, NTO IRE-Polus (NTO), to Rusnano for $25 million. Rusnano was established in 2007 to invest in nanotechnology development, including projects in solar energy, nanostructured materials, medicine and biotech, mechanical engineering and metal working, optoelectronics and infrastructure.
Under the agreement, Rusnano could purchase up to an additional 12.5 percent of NTO for an additional $25 million over the next five years if NTO achieves certain sales targets. IPG will maintain majority ownership and control of NTO and has a call option after three years to buy back the minority stake at a predetermined value. Rusnano has an option after five years to sell its minority stake to IPG at a predetermined value.
“This partnership with Rusnano enables IPG to more strategically address a large and growing market in Russia for fiber optic telecom equipment and laser systems and to increase industrial laser sales in that territory,” said Gapontsev. IPG will use the proceeds from the transaction to make strategic R&D and capital expenditure investments in NTO and develop its sales infrastructure in the Russian market, he said.
"In addition, a partnership with Rusnano will significantly expand the number of telecommunications, industrial and other important commercial relationships we have in Russia, ultimately driving growth by increasing our portfolio of customers,” Gapontsev added.
The company said it expects the uptick in sales to continue through the end of the year. IPG said it expects revenues in the range of $80 million to $86 million for the fourth quarter of 2010, with earnings in the range of 30 to 35 cents a share.
For more information, visit: www.ipgphotonics.com