What: Shares of Cognex (CGNX -0.91%) traded down as much as 12% on Tuesday after its third-quarter earnings, released Monday evening, raised concerns about its growth prospects.
So what: It was a tough comparable quarter for Cognex, as a large, one-time customer order occurred during the same quarter last year. Third-quarter revenue from continuing operations declined 30% year over year to $107.6 million, falling within the $106 million to $106 million revenue range the company provided last quarter, while earnings decreased 45% to $0.29 per share.
Although the results technically fell in line with analyst expectations, the company experienced a slowdown in demand from customers in Asia and automotive industry, which it believes will continue in the fourth quarter. Consequently, it expects to generate between $94 million and $97 million in revenue during the fourth quarter, which represents 0% to 3% annual increase. This compares unfavorably to the $111 million consensus already built into expectations.
Now what: As Cognex's third-quarter earnings have shown, its business remains sensitive to what's happening in the industrial economy. Ultimately, without a thriving world economy, it appears that Cognex's results could remain subdued for the foreseeable future.
