Shares of fiber laser technology company IPG Photonics (IPGP -0.72%) plummeted today, down by 16% as of 8:50 a.m. EDT, after the company reported second-quarter earnings. The results missed the market's expectations.
Revenue in the second quarter increased 25% to $372 million, which was shy of the $376.9 million in sales analysts were expecting. Materials processing revenue comprised 93% of total sales during the quarter. That translated into net income of $69.8 million, or $1.29 per share, while the consensus estimate had called for $1.40 per share in profits.
"We were pleased with our revenue growth this quarter, driven by improved underlying demand in cutting applications in Europe and U.S. and robust growth in welding applications across most geographies, which was partially offset by moderated demand for cutting in China and an impact from supply chain constraints," CEO Eugene Scherbakov said in a statement. "Strong demand in emerging materials processing applications, such as solar cell manufacturing, cleaning and 3D printing, also contributed to our revenue growth in the quarter."
In terms of guidance, the company is forecasting revenue of $350 million to $380 million in the third quarter. That should result in earnings per share in the range of $1.10 to $1.40. Compare that outlook to the consensus estimates, which call for $383.1 million in revenue and earnings per share of $1.45, and you can see why investors are disappointed.
Scherbakov acknowledged that IPG Photonics continues to suffer from supply constraints and near-term uncertainty.