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.

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