IPG Photonics IPGP reported fourth-quarter 2023 earnings of 89 cents per share, lagging the Zacks Consensus Estimate by 6.32%. The company reported a loss of $1.91 per share in the year-ago quarter.

Revenues of $299 million decreased 10.4% on a year-over-year basis but beat the consensus mark by 4.5%. Unfavorable forex hurt revenue growth by 2%.

Emerging growth product sales accounted for 46% of revenues and benefited from growth in handheld welder, medical and higher beam delivery revenues.

Quarterly Details

Materials processing (87% of total revenues) decreased 12% year over year. The downside can be attributed to lower revenues from cutting. Revenues from other applications increased 4% year over year.

Sales of high-power CW lasers were down 19% year over year due to lower demand, high customer inventories and increased competition in cutting applications in China.

IPG Photonics Corporation Price, Consensus and EPS Surprise

IPG Photonics Corporation price-consensus-eps-surprise-chart | IPG Photonics Corporation Quote

Pulsed laser sales declined 40% year over year due to lower demand in solar cell manufacturing and foil-cutting applications.

Sales decreased 3% in North America, 25% in China and 5% in Japan on a year-over-year basis. However, sales increased 1% year over year in Europe.

IPG Photonics reported a gross margin of 38.2% compared with 18.2% in the year-ago quarter.

Balance Sheet

As of Dec 31, 2023, IPG Photonics had $1.18 billion in cash & cash equivalents compared with $1.10 billion as of Sep 30, 2023.

Guidance

For first-quarter 2024, IPG Photonics anticipates sales to be $235-$265 million. Earnings are projected between 30 cents per share and 60 cents per share.

Zacks Rank & Stocks to Consider

IPG Photonics currently carries a Zacks Rank #4 (Sell).

Shares of IPGP have declined 4.5% on a year-to-date basis, underperforming the Zacks Computer and Technology sector’s return of 8.3%.

Shopify SHOP, BlackLine BL and CrowdStrike CRWD are some better-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shopify shares have gained 14.4% year to date. SHOP is set to report its fourth-quarter 2023 results on Feb 13.

BlackLine shares have declined 2.6% year to date. BL is set to report its fourth-quarter 2023 results on Feb 13.

CrowdStrike shares have jumped 25.8% year to date. CRWD is set to report its fourth-quarter fiscal 2024 results on Mar 5.

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