IPG Photonics to Post Q2 Earnings: What's in the Cards?

IPG Photonics IPGP is slated to release its second-quarter 2024 results on Jul 30.

For the second quarter, the company anticipates sales in the range of $240-$270 million. Earnings per share are projected between 30 cents and 60 cents.

The Zacks Consensus Estimate for earnings is pegged at 48 cents per share, unchanged over the past 30 days. The company reported earnings of $1.31 per share in the year-ago quarter.

The consensus mark for revenues stands at $255.4 million, suggesting a decrease of 24.88% from the year-ago quarter.

Factors to Note

IPG Photonics is expected to have suffered from lower materials processing sales, primarily due to weakness in cutting and marking applications. The Zacks Consensus Estimate for Materials Processing revenues for the second quarter is pegged at $227 million, indicating a decline of 27.7% year over year.

Continued economic uncertainty with low PMI numbers in Europe, North America and Japan is likely to have negatively impacted industrial demand and capital investments in the quarter under review.

However, IPGP is expected to have benefited from strong demand for the handheld welder, LightWELD. The company is focusing on key growth markets and applications, including welding, cleaning, heating and medical applications. These areas are expected to have benefited top-line growth by diversifying revenues away from more competitive applications, such as cutting and marking.

IPG is also starting to ship handheld welding devices to Miller Electric, which is expected to have boosted welder sales in the second quarter and have a more measurable impact in the second half of the year. Additionally, the order pipeline and customer interest for handheld welders remain strong.

Revenues in 3D printing applications also increased as the industry continues to use high-quality lasers for metal powder melting to create parts. IPG's strong position in this market is expected to have bolstered revenue growth in the to-be-reported quarter.

Revenues from IPG Photonics' emerging growth products accounted for 45% of total sales in the first quarter of 2024. These products, which improve the speed and quality of manufacturing processes while reducing energy consumption and environmental impacts, are expected to have contributed significantly to overall revenues.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

IPG Photonics has an Earnings ESP of 0.00% and a Zacks Rank #2 at present.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Arista Networks ANET has an Earnings ESP of +0.95% and sports a Zacks Rank #1 at present.

Arista Networks' shares have gained 33.4% year to date. ANET is set to report its second-quarter 2024 results on Jul 30.

Apple AAPL has an Earnings ESP of +3.23% and a Zacks Rank of 2 at present.

Apple's shares have gained 13% year to date. AAPL is set to report its third-quarter fiscal 2024 results on Aug 1.

Cognizant Technology Solutions CTSH has an Earnings ESP of +0.09% and a Zacks Rank #2 at present.

Cognizant Technology Solutions' shares have lost 3.1% year to date. CTSH is set to report second-quarter 2024 results on Jul 31.

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