What happened

IPG Photonics (NASDAQ:IPGP) stock closed 9.5% higher on Tuesday after the maker of fiber optic lasers reported fiscal Q1 2018 earnings earlier in the day. IPG earned $1.93 per share in Q1, $0.13 better than Wall Street had estimated it would -- much like last quarter. Quarterly sales of $359.9 million likewise leapfrogged expectations for sales of just $347 million.

Green stoplight

All lights are green for this laser maker. Image source: Getty Images.

So what

Year over year, IPG Photonics' sales soared 26%. The company added 150 basis points to its gross profit margin tally, scoring 56.5% in the quarter. Operating profit margins improved even more, rising 370 basis points to land at 39.2%.

As you might expect, by earning much more profit per revenue dollar, IPG magnified its sales gains on the bottom line, where earnings per diluted share jumped 40%. Result: Both sales and earnings hit "records" for IPG.

Now what

Looking forward, IPG Photonics is guiding investors to expect Q2 sales between $400 million and $430 million, up 8% to 15% over last year's Q2. Earnings per diluted share should range from $2.05 to $2.35, and grow between 7% and 23% in comparison to last year. In both cases, the numbers IPG is promising today exceed what Wall Street has been expecting IPG to produce in Q2.

No wonder investors are excited.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends IPG Photonics. The Motley Fool has a disclosure policy.