IPG Photonics Beats On Q1 Earnings, Issues Robust Q2 Guidance

IPG Photonics Corp IPGP reported first-quarter FY21 revenue growth of 39% year-on-year to $345.6 million, beating analyst consensus of $328.94 million.
Materials processing sales rose 45% from higher sales in welding, cutting, solar cell manufacturing, sintering, and ablation applications. Sales into other applications declined 9% as strength in advanced applications and telecom was offset by lower medical revenue.
Sales of high-power continuous wave (CW) lasers rose 43% from the growth of ultra-high power fiber lasers and strong demand for pulsed and adjustable mode beam (AMB) lasers.
Sales rose 104% in China, 14% in Europe, 9% in North America while declining 21% in Japan.
The gross margin expanded 620 basis points to 47.5%, and the operating margin expanded 770 basis points to 25.7%.
Net income rose 87% to $68.1 million. EPS of $1.26 beat the analyst consensus of $1.09.
Continued strong demand in China and North America and a further improvement in Europe drove the results, Chair Dr. Valentin Gapontsev said.
Initial orders for handheld welder were strong, and the company was increasing production of this innovative device to meet growing customer demand.
IPG generated $88 million in operating cash flow, and it held $896.7 million in cash and equivalents.
Guidance: Q2 revenue outlook lies between $360 million to $390 million, versus the analyst consensus of $364.21 million. EPS guidance lies between $1.20 and $1.50, versus the analyst consensus of $1.36.
Price action: IPGP shares closed lower by 2.55% at $211.57 on Monday.

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