What happened
Shares of IPG Photonics (IPGP 0.83%) 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 gave IPG Photonics the green light despite its earnings miss and weak guidance. Image source: Getty Images.
So what
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.
Check out the latest IPG earnings call transcript.
Now what
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.
