IPG Photonics Corp. (NASDAQ:IPGP) reported third-quarter results on Tuesday that topped Wall Street expectations.
The company reported adjusted earnings of 35 cents per share, exceeding analysts’ consensus estimate of 14 cents.
Net sales for the quarter totaled $250.79 million, representing a 7.6% increase from the prior-year period and surpassing market expectations of $239.80 million.
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Regional performance was mixed, with sales up 15% in Asia and 8% in North America, but down 7% in Europe year over year.
Adjusted gross margin was 39.8% and GAAP gross margin increased 39.5%, while adjusted EBITDA came in at $36.96 million for the quarter. The improvement in gross margin was driven by higher revenue and reduced inventory provisions, though partially offset by higher product costs and tariffs.
The adjusted operating income for the quarter increased to $12.43 million, up from $3.28 million in the year-ago period, while the operating margin for the quarter rose to 3.1%.
The company ended the quarter with cash and cash equivalents of $346.03 million.
Share Repurchase
The company repurchased $16 million of its shares during the quarter and continued to pursue tuck-in acquisition opportunities.
Outlook
For the fourth quarter, IPG expects adjusted earnings per share of 5 cents to 35 cents, compared with analysts’ forecast of 23 cents.
The company projects revenue between $230 million and $260 million, versus the $243.1 million expected by analysts, and adjusted EBITDA in the range of $21 million to $38 million and anticipates an adjusted gross margin in the range of 36% to 39%.
CEO Commentary
Dr. Mark Gitin, Chief Executive Officer of IPG Photonics, stated, “We delivered third-quarter results at the top end of our expectations with double-digit revenue growth, excluding divestitures, driven by business wins and progress in key strategic initiatives as well as stable industrial demand and growth in battery production.”
“We continue to balance expense management with investments we are making in innovation and strengthening the organization that will position IPG for the next phase of sustainable, profitable growth,” he added.
Price Action: IPGP shares were trading lower by 2.13% to $84.07 at last check Tuesday.
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Photo by Pavel Kapysh via Shutterstock
