OXFORD, Mass., Aug. 5, 2020 — IPG Photonics has reported second quarter revenue of $296 million, a year-over-year decrease of 19% and nearly $68 million. Earnings per share dropped to $0.71, representing a 47% decrease year-over-year and down $0.63 from second quarter 2019. In announcing its quarterly results, the company cited foreign exchange loss, change for restructuring, and long-lived asset impairment as contributors to its $0.20 earnings per share quarterly decrease.
The company reported a quarterly profit of $38.2 million, down 47% from $72.3 million in the second quarter of 2019. IPG in February reported a 10% revenue loss for the fiscal year.
“Despite the continued challenges to our business from the COVID-19 pandemic, we delivered second-quarter results above our guidance range on better-than-expected performance in China and strength in new products,” IPG Photonics CEO Valentin Gapontsev said. “Although our visibility is constrained in the current demand environment, we are demonstrating good progress in leading-edge solutions thanks to our technology differentiation and low-cost production capabilities. We continue to believe that our strong balance sheet and free-cash flow provide us ample flexibility to respond to business disruptions and emerge from the pandemic in a stronger competitive position.”
IPG Photonics registered better-than-anticipated results based on a Zacks consensus estimate for second-quarter earnings — projections of $0.58 earnings per share and total revenue of $275 million.
Materials processing sales dip
Lower sales in cutting, welding, and marking applications caused materials processing sales for IPG to fall more than 20% year-over-year. Advanced applications and medical procedural devices led to a 36% year-over-year increase in total applications sales. Materials processing sales accounted for nearly 92% of the company’s total quarterly revenue.
High-power CW lasers once again represented more than half of total revenue, despite a 26% decrease from 2019 due to the effects of COVID-19 on the global market and lower average selling prices. More than half of IPG’s CW laser sales were fiber lasers at 6 kW of power or greater. Regionally, sales decreased 24% in Europe, 16% in North America and Japan, and 11% in China.
Continued booking growth in China offset by weaker order trends in other regions, paired with global demand uncertainty, contribute to third-quarter projections. IPG anticipates revenue in the $280 million to $310 million range, with a slightly raised tax rate, up from 23% this quarter to slightly over 25%. Earnings per share projections range from $0.70 to $1.00.
According to Gapontsev, IPG continues to benefit from near-term growth opportunities in ultrahigh power cutting, electric vehicle battery processing, and medical industry devices and systems.
Access a comprehensive breakdown of quarter-two financial results here.