IPG Photonics Q3 Earnings Surpass Estimates, Plans To Acquire Clean-Lasersysteme

IPG Photonics Corporation IPGP shares are trading higher on Tuesday.

The company reported that the third quarter adjusted earnings per share was 29 cents, beating the street view of 20 cents. Quarterly revenues of $233.143 million beat the analyst consensus estimate of $228.445 million.

Revenues slumped 23% year over year due to lower demand in industrial and e-mobility markets. 

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Gross margin of 23.2% decreased significantly year over year due to increased inventory provision and reduced absorption of manufacturing expenses, partially offset by lower tariffs and shipping costs.

The inventory provision included $30 million related to a change in the estimate of recoverability due to the current demand environment, which reduced gross margin by 12.8% and diluted EPS by $0.49.

During the third quarter, IPG generated $66 million in cash from operations and spent $23 million on capital expenditures and $74 million on share repurchases.

In a separate press release, the company said it had signed a definitive agreement to acquire Clean-Lasersysteme GmbH (cleanser), a leader in laser cleaning systems.

The transaction strengthens IPG’s global position in high-precision laser systems for cleaning applications, an attractive growth market. It is expected to close in the fourth quarter of 2024.

Outlook: IPG Photonics anticipates fourth-quarter revenue between $210 million and $240 million, compared to the $228.4 million estimate, with adjusted earnings per share projected to be between $0.05 and $0.35, versus the $0.20 estimate.

Price Action: IPGP shares are trading higher by 10.4% to $87.56 at last check Tuesday.

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