IPG Photonics reports 13% dip in Q3 profits
Photo | Matt Pilon
The Oxford headquarters of IPG Photonics.
Shares of Oxford laser manufacturer IPG Photonics dropped more than 11 percent to start trading Tuesday as the company reported a 9-percent dip in year-over-year revenue and 13-percent decline in profit.
For the third quarter, the company reported $356.3 million in revenue compared to $392.6 million for the same quarter last year. Net income was $100.5 million, down from the $115.6 million a year ago.
For the year, both revenue and profit are up 8 percent and 11 percent, respectively, but that apparently wasn’t enough to convince investors to stick around.
In its press release announcing the sub-par quarterly earnings report, CEO Valentin Gapontsev put the blame on macroeconomic headwinds and geopolitical factors leading to a reduced demand in China and Europe.
“As a result, order flow has continued to soften,” Gapontsev said, noting the aggressive pricing by Chinese competitors.
The company’s market cap has plummeted this year from around $14 billion when the company’s stock was trading for above $260 in January to about $6.2 billion Wednesday morning, when the company’s stock opened at $115.
Gapontsev first made mention of the difficult trade environment when announcing second-quarter financials in July. Since then, the company’s stock has slid to its lowest price since February 2017.
There are some encouraging signs on the horizon, he noted, including growth in laser cutting system orders in China , but full-year revenue growth is only expected to be between 1 percent and 4 percent.
By comparison, the company in February said its 2017 revenue grew by 40 percent.
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