GSI Group 1Q Profit Drops 44.7%, Offers Disappointing Outlook

GSI Group Inc. GSIG reported 44.7% drop in net income to $1.91 million in the first quarter from $3.45 million in the prior year quarter. Its earnings also dropped 50% to $0.05 a share from $0.10 a share in the corresponding quarter of the last year. On an adjusted basis also, its earnings fell 10% to $0.18 a share from $0.20 a share in the previous year quarter. However, that was in line with the Street analysts expectations. The company's revenue fell to $90.3 million from $94.6 million in the year-ago quarter while adjusted revenue rose to $90.3 million from $89.0 million representing 1.5% growth. The revenue topped the analysts' expectations of $88.90 million. Commenting on the first quarter results, GSI Group CEO, John Roush, said, "We delivered another solid quarter of results in the first quarter, achieving all of our major objectives despite continued weakness in the industrial capital spending environment. Orders were strong across the board in the quarter, which positions us well for the second quarter and gives us further confidence around our medium term growth outlook." Moving ahead, the Company expects adjusted revenue of about $95 million and adjusted EPS to be in the range of $0.23 - $0.25 for the second quarter. This compares to adjusted EPS of $0.20 in the second quarter of 2015. Analysts estimate earnings to be $0.25 a share and $95.5 million. For the full year too, GSI continued to expect adjusted earnings of $0.93 a share on revenues of $375 - $390 million for the full year 2016. Street expects $1.00 a share and revenue of $383.30 million. Following the results, shares of the company traded 6.7% down.