IPG Photonics Beats on Both Top and Bottom Lines

IPG Photonics (Nasdaq: IPGP  ) reported earnings on July 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), IPG Photonics beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share improved.

Gross margin dropped, while operating margin and net margin expanded.

Revenue details
IPG Photonics reported revenue of $137.9 million. The 12 analysts polled by S&P Capital IQ wanted to see revenue of $135.2 million on the same basis. GAAP-reported sales were 13% higher than the prior-year quarter's $121.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.68. The 10 earnings estimates compiled by S&P Capital IQ predicted $0.66 per share. GAAP EPS of $0.72 for Q2 were 14% higher than the prior-year quarter's $0.63 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 54.3%, 40 basis points worse than the prior-year quarter. Operating margin was 38.5%, 80 basis points better than the prior-year quarter. Net margin was 27.4%, 220 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $146.2 million. On the bottom line, the average EPS estimate is $0.73.

Next year's average estimate for revenue is $557.6 million. The average EPS estimate is $2.77.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,428 members rating the stock outperform and 32 members rating it underperform. Among 409 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 401 give IPG Photonics a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on IPG Photonics is outperform, with an average price target of $65.55.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of IPG Photonics. Motley Fool newsletter services have recommended buying shares of IPG Photonics. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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