What happened
Shares of Cognex (CGNX -0.83%), a maker of machine-vision systems used to automate manufacturing processes, were tumbling today after the company reported worse-than-expected fourth-quarter results and issued lackluster first-quarter guidance.
The stock was down by 14.3% as of 11:50 a.m. ET.
So what
Cognex reported non-GAAP (generally accepted accounting principles) adjusted earnings of $0.27 for the fourth quarter, which was down from $0.30 in the year-ago quarter and below analysts' consensus estimate of $0.32 per share.
Additionally, the company's revenue of $239.4 million was down 2% year over year and fell below Wall Street's expectation of $245.7 million. Cognex CEO Rob Willett said on the company's earnings call that the results were due to near-term challenges and are "not representative of our long-term growth expectations."
The company's gross margin also fell slightly in the quarter to 71%, down from 72% in the year-ago quarter, due to Cognex needing to quickly replace components following a fire in the previous quarter.
Investors likely focused some of their attention on management's comments concerning a slowdown in spending from some of Cognex's largest customers and "slower business activity" toward the end of 2022. Willett said on the call:
... we continue to see a post-pandemic slowdown with a few of our largest e-commerce customers who have temporarily reduced their investments to absorb excess capacity.
Now what
The company estimates its first-quarter guidance will be $190 million at the midpoint, which is below Wall Street's average estimate of $238.8 million.
Investors can likely expect some additional short-term headwinds for the company, considering that Willett said that some of Cognex's customers are "wary" of committing to significant investments right now.
