Tuesday, fiber-based lasers and amplifier maker IPG Photonics Corp. (IPGP), reported a rise in profit for the fourth quarter, as revenues increased 6%, driven by strong sales of fiber lasers for materials processing applications and overseas demand. Earnings for the quarter came in line with analysts' expectations, while revenues fell short. The company also provided guidance for the first quarter of fiscal 2009.
The Oxford, Massachusetts-based company's net income for the fourth quarter rose 9% to $9.1 million from $8.3 million in the prior-year quarter. On a per share basis, earnings rose 11% to $0.20 from $0.18 in the same quarter last year.
On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.20 per share for the fourth quarter. Analysts' estimates typically exclude one-time special items.
Revenue for the quarter climbed 6% to $58.2 million from $55.1 million in the year-ago quarter, just shy of analysts' consensus revenue estimate of $58.50 million for the quarter.
On a geographical basis, sales in Germany for the quarter surged 48% year-over-year while sales grew 25% in Japan from the prior year. Overall sales in Asia, however, were down 10% as a result of weakness from marking applications in China. Overall sales in Europe and the Rest of the World were up with North America relatively flat for the quarter.
For the fourth quarter, materials processing end market continued to represent the majority of the company's sales and the greatest growth driver, accounting for 78% of revenues. High power laser sales grew 32% on a year-over-year basis, representing 43% of revenues, while sales of pulsed lasers, slowed due to weakening demand from customers.
Operating income for the quarter increased 20% to $14.8 million from $12.4 million in the previous-year quarter.
Gross margin for the quarter increased to 45.6% from 42.9% in the same quarter last year.
For fiscal year 2008, net income increased 23% to $36.7 million from $29.9 million last year, while earnings rose 22% to $0.79 per share from $0.65 per share last year. Revenue climbed 21% to $229.1 million from $188.7 million in the prior year.
The consensus estimates expected earnings of $0.80 per share on revenues of $229.39 million.
Looking ahead to first quarter of 2009, IPG Photonics anticipates earnings in the range of $0.09 - $0.14 per share and expects revenues within a range of $45 million - $50 million.
Analysts currently expect the company to report earnings of $0.16 per share on revenues of $49.78 million for the first quarter.
The company indicated cutting expenses by freezing new hiring, cutting overtime, curtailing bonuses, lowering headcount through attrition and implementing tighter spending controls and expects these initiatives to generate $4.0 million - $6.0 million in annual operating expense savings.
IPGP is currently trading at $8.96, up $0.42 or 4.92%, on a volume of 0.14 million shares on the Nasdaq.
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