IPG Photonics Corp. (IPGP) Friday reported an increase in fourth-quarter profit, driven mainly by a 22 percent growth in revenues. However, earnings for the quarter missed analysts' estimates by a penny as margins declined, with revenues also short of expectations.
Moving forward, the company provided its guidance for the first quarter of 2012 that is expected to come in ahead of current expectations.
The Oxford, Massachusetts-based company's profit for the quarter improved to $31.1 million or $0.64 per share from last year's $27.1 million or $0.56 per share last year. On average, 11 analysts polled by Thomson Reuters expected earnings of $0.65 per share for the quarter. Analysts' estimates usually exclude one-time items.
IPG, which makes optical fiber-based lasers and amplifiers, said revenues for the quarter grew 22 percent to $123.5 million from $101.0 million last year, driven by high-power laser sales for materials processing applications. Ten Street analysts on consensus estimated revenues of $128.58 million for the quarter
Chief Executive Valentin Gapontsev said, "We saw continued robust sales in materials processing, which accounted for 90 percent of total sales and rose 32 percent year-over-year. High power lasers, our largest product line, grew 62 percent year-over-year in the fourth quarter, driven primarily by demand for cutting and welding applications in Europe and North America from OEMs, as well as multiple applications in the automotive industry."
Gross margins for the quarter dropped to 53.8 percent from 55.0 percent last year. Operating margin also dipped to 37.3 percent from 38.4 percent last year.
Looking forward to the first quarter of 2012, the company expects earnings in a range of $0.54 to $0.64 per share, on revenues of $115 million to $125 million. Analysts currently sees earnings of $0.54 per share on revenues of $115.83 million for the quarter.
"We typically experience some seasonality in our first quarter. So while we expect first-quarter sales to grow year-over-year, the low- to mid-range of our guidance reflects a potential sequential decline from the fourth quarter from seasonal factors," said Gapontsev.
IPGP is currently trading on the Nasdaq at $54.50, up $0.90 or 1.68%, on a volume of 1.2 million shares.
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