Shares of IPG Photonics (IPGP -0.10%) have tanked today, down by 10% as of 12:50 p.m. EDT, after the company reported first-quarter earnings. The results topped Wall Street's forecasts, but the company also announced a new CEO transition.
Revenue in the first quarter came in at $345.6 million, easily beating the consensus estimate of $328.9 million in sales. That resulted in earnings per share of $1.26, also ahead of the $1.09 per share in profits that analysts were modeling for. The fiber optics and laser technology company said materials processing sales increased 45% due to strong demand from welding, cutting, and solar cell manufacturing applications, among others.
Current COO Eugene Scherbakov has been named IPG's next CEO, effective immediately, with current CEO and Chairman Valentin Gapontsev transitioning to the role of executive chairman. Gapontsev will remain active in the company's operations, directing strategy and R&D. Scherbakov is a company veteran who has been with IPG since 1995.
"We were pleased to see continued strong demand in China and North America as well as a further improvement in Europe," Gapontsev commented regarding the results. "These drove both year-over-year and sequential increases in sales, despite typical seasonality, helping us achieve our best first quarter results since 2018, which was a record year, and a solid start to 2021."
Guidance for the second quarter calls for revenue in the range of $360 million to $390 million, which should result in earnings per share of $1.20 to $1.50. Compare those forecasts to the consensus estimates of $364.2 million in revenue and $1.36 per share in profit.