Shares of IPG Photonics (NASDAQ:IPGP) popped more than 10% in Tuesday morning trading, after the Oxford, Mass.-based fiber laser-maker reported mixed financial results for fiscal Q4 and full-year 2018.
After retracing a bit, IPG ended the day still up 7.2%. Curiously, though, it did so despite missing earnings expectations.
Expected to earn $1.41 per share on $314.8 million in sales, IPG succeeded in raking in sales of $330.1 million, which was more than expected, but earned only $1.40 per share on those sales, which was less than expected.
Investors appear to have been willing to forgive that small miss, though, perhaps because sales declined less than expected in the quarter, down only 9% year over year. As for the earnings miss, it was only by a penny, and little more than a rounding error in a quarter where earnings per share climbed 46% in comparison with last year's Q4.
For the full year, sales of $1.46 billion were up 4% from what IPG made in 2017. Profits rose 16%, with IPG ending the year with a GAAP per-share profit of $7.38.
Summing up, sales declined, but not as badly as feared in Q4. And profits climbed a lot -- but missed expectations. And in case you're not confused enough yet about whether IPG's news was "good" or "bad," here's the capstone to the report: IPG is now guiding for Q1 2019 sales to come in between $290 million and $320 million, well below the $328 million in sales that Wall Street has been projecting. And IPG says its earnings will be only $1 to $1.20 a share, also far short of the $1.43 per share Wall Street is looking for.
That's pretty lousy guidance to tack on to a quarter's worth of mixed earnings news -- and investors are buying IPG Photonics stock anyway.