Cognex Corporation CGNX reported a second-quarter FY23 revenue decline of 12% to $242.51 million, beating the consensus of $237.76 million.
Adjusted EPS was $0.32 (-22% YoY), beating the consensus of $0.28.
Revenue declined due to ongoing softness in e-commerce logistics and weaker demand from the company's factory automation customers.
The gross margin expanded to 74% in Q2 compared to 72% in 2Q22.
As of July 2, 2023, Cognex's financial position continued to be strong, with $832 million in cash and investments and no debt.
Cognex recorded a pre-tax gain of $2.5 million in the quarter for proceeds from business interruption insurance related to the June 2022 fire at its primary contract manufacturer.
CGNX spent $49 million to repurchase common stock and paid shareholders $24 million in dividends.
"We delivered second quarter revenue at the top end of our expected range, gross margin in line with our guidance, and favorable operating expenses leading to a strong sequential step-up in operating margin. However, these results are not representative of the business conditions we are experiencing in our markets, which continue to weaken further," commented Robert J. Willett, CEO of Cognex.
Dividend: Cognex declared a quarterly cash dividend of $0.07 per share, payable on September 1, 2023, to all shareholders of record at the close of business on August 18, 2023.
3Q23 Outlook: The company expects revenues of $180 million-$200 million versus the consensus of $250.36 million. This represents a decrease sequentially driven by further softening of manufacturing investment.
The gross margin for Q3 is expected to be in the low 70% range, a decrease from 74% in Q2, driven primarily by operating deleverage and less favorable revenue mix.
Price Action: CGNX shares are trading lower by 7.02% at $47.44 premarket on Thursday.
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