IPG Photonics Shares Plunge On Q2 Earnings Miss, Weak Q3 Outlook

IPG Photonics Corp IPGP reported second-quarter FY21 revenue growth of 25% year-on-year to $371.7 million, missing the analyst consensus of $376.94 million.
The gross margin expanded by 260 bps to 48.6%. The operating margin expanded 890 bps to 24.8%.
EPS of $1.29 missed the analyst consensus of $1.40.
It held $1.5 billion in cash and equivalents.
The company generated $116 million in operating cash flow. It repurchased stock worth $39 million.
Improved underlying demand in cutting applications in Europe and the U.S. and robust growth in welding applications across most geographies drove revenue growth partially offset by moderated demand for cutting in China and impact supply chain constraints.
"Book-to-bill was above one in the second quarter increasing our total backlog. However, deliveries for cutting applications in China are likely to be extended over the remainder of the year and there is continued uncertainty due to the ongoing impact of supply chain constraints on our customers and us," said CEO Eugene Scherbakov.
Outlook: IPG sees Q3 revenue of $350 million- $380 million, below the analyst consensus of $383.12 million.
It sees Q3 EPS of $1.10 - $1.40, below the analyst consensus of $1.45.
Price action: IPGP shares traded lower by 18.2% at $177.81 on the last check Tuesday.

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