Shares of IPG Photonics (IPGP -3.39%) were down 11.8% as of 3:15 p.m. EDT Tuesday after the optical-fiber laser specialist announced third-quarter 2019 results that were weaker than expected.
Quarterly revenue declined 8% year over year to $329.1 million, translating to a more than 40% decline in net income to $57.3 million, or $1.07 per share. For perspective, consensus estimates predicted higher earnings of $1.21 per share on revenue closer to $337 million.
"Despite the challenging macroeconomic backdrop and competitive landscape in China, we demonstrated good progress selling ultra high power lasers, new products, accessories, and complete laser systems," CEO Valentin Gapontsev said.
Furthermore, given the current business environment, Gapontsev noted IPG also launched expense-reduction initiatives this quarter and continues to assess its cost structure.
IPG also told investors it expects fourth-quarter revenue of $270 million to $300 million, with earnings per share ranging from $0.55 to $0.95. Both ranges were well below Wall Street's average models for fourth-quarter earnings of $1.13 per share on revenue of roughly $324 million.
In the end, with shares trading roughly flat from where they stood around this time last year, it's no surprise to see the stock falling hard as investors absorb this underwhelming report.