Please ensure Javascript is enabled for purposes of website accessibility

Why IPG Photonics Stock Tanked Today

By Evan Niu, CFA - May 4, 2021 at 1:32PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The fiber optics specialist reports first-quarter results and a CEO transition.

What happened

Shares of IPG Photonics (IPGP -3.39%) 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.

So what

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.

Illustration of strands of light emanating from fiber optic laser

Image source: Getty Images.

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."

Now what

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

IPG Photonics Corporation Stock Quote
IPG Photonics Corporation
IPGP
$90.94 (-3.39%) $-3.19

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
311%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.