Monday, Cognex Corp. (CGNX), a provider of machine vision products, said it posted a loss for the first quarter compared to profit a year ago, as revenues dipped 30% due to dismal global business environment. Further, the company announced a 67% reduction in quarterly dividend. Going forward, the company added that it expects to report loss from continuing operations for the second quarter with revenues predicted to decline both year-on-year and sequentially.
The Natick, Massachusetts-based company posted a net loss of $3.41 million or $0.09 per share for the quarter, compared to net income of $8.48 million or $0.20 per share in the year-ago quarter. Seven analysts polled by Thomson Reuters expected the company to post a loss of $0.05 per share. Analysts' estimates typically exclude special items. For the recent quarter, Cognex recorded a restructuring charge of $297 thousand and a foreign currency loss of $392 thousand, compared to a foreign currency gain of $1.12 million in the year-ago quarter.
Quarterly revenues fell 30% to $42.29 million from $60.51 million in the prior-year quarter.
"Our results and the dividend reduction announced today are disappointing, and are due to the dismal global business environment," said Robert Shillman, chairman and chief executive officer of Cognex.
"Customer demand slowed considerably in the first quarter as manufacturers cut spending, and we see no near-term recovery," Shillman added. Cognex said revenue from the semiconductor and electronics capital equipment and factory automation markets declined both year-on-year and sequentially, and revenue from the surface inspection market declined on a sequential basis. Excluding $4.4 million of revenue in the first quarter of 2009 related to a single customer contract that had been deferred until the contract was completed, the largest decline in absolute dollars both year-on-year and sequentially was in factory automation.
Gross margin for the quarter was 68% of the revenue, down from 72% in the same period last year. Excluding a deferred revenue gain, gross margin would have been 65% for the quarter. The company attributed the decrease in gross margin to product mix, and higher percentage of revenue from surface inspection systems, which have a lower product margin than modular vision systems.
For the quarter, Cognex recorded increased investment and other income of $2.68 million, compared to $2.33 million in the year-ago quarter.
Cognex announced a quarterly cash dividend of $0.05 per share, which represents a reduction of $0.10 from the $0.15 dividend, paid in the prior quarter. The dividend is payable on June 19, 2009, to all shareholders of record at the close of business on June 5, 2009.
Shillman further stated that in view of the actions taken to cut costs, the company expects operating expenses for the second quarter to decrease by 7% to 10% on a sequential basis, excluding pre-tax restructuring charges of approximately $4.5 million.
Given the high degree of uncertainty resulting from global economic conditions, Cognex said it is not providing revenue or earnings per share guidance for the second quarter. However, Cognex estimates that it will report a loss from continuing operations for the quarter both including and excluding pre-tax restructuring charges. Second quarter revenue is expected to decrease both year-on-year and sequentially.
CGNX closed Monday's trading at $14.39, up $0.34 or 2.42%, on a volume of about 383 thousand shares. In the after hours, the shares traded at $14.37, down $0.02 or 0.14%.
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