Fiber and diode laser maker IPG Photonics Corp. (IPGP), Thursday reported a 12 percent rise in fourth-quarter profit, with growth led by demand for high-power lasers in materials processing applications, partly offset by lower margins. Nevertheless, the company's quarterly earnings fell short of Street estimates, as did revenues.
Moving forward, IPG provided its guidance for the first quarter, with the midpoint of earnings indicated to miss Street estimates, while revenues are expected to come in ahead of expectations. Shares of the company plummeted more than 10 percent in morning trade on the Nasdaq.
Oxford, Massachusetts-based IPG Photonics reported fourth-quarter net income of $35 million or $0.67 per share, up from $31 million or $0.64 per share last year.
On average, 11 analysts polled by Thomson Reuters estimated earnings of $0.72 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter rose to $145 million from $124 million a year ago. Analysts estimated revenues of $146.44 million for the quarter.
"Materials Processing sales, which make up the majority of our business, grew 14% for the fourth quarter," said CEO Valentin Gapontsev.
"High-power laser sales increased 10% from the prior year, driven by cutting and welding applications, primarily used by automotive, heavy industry and general manufacturing. On a geographic basis, we performed well across most regions, particularly in North America and Asia."
Results for the quarter were impacted by gross margin that fell to 51.8 percent from 53.8 percent in the prior year. Operating margin was lower at 32.6 percent, compared with 37.3 percent a year ago.
For the first quarter, the company expects earnings in the range of $0.65 to $0.75 per share, on revenues of $145 million to $155 million.
Analysts currently estimate earnings of $0.72 per share on revenues of $145.45 million.
IPG is trading at $62.14, down $7.42 or 10.56%, on a volume of 2.5 million shares.
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