Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of laser beam tools specialist Rofin-Sinar Technologies
So what: Rofin-Sinar's first quarter was so disappointing -- EPS of $0.28 versus the consensus of $0.36 -- that analysts are being forced to lower their growth expectations. Particularly weak demand in the machine tool and electronics space continues to weigh on results, and it's clear that Mr. Market doesn't expect things to turn anytime soon.
Now what: Rofin-Sinar now sees second-quarter EPS of $0.27-$0.30 on revenue of $130 million to $135 million, versus Wall Street's estimate of $0.37 on a top line of $142 million. "We expect business conditions in China to improve as we have customer indications, based on more optimistic judgements about their future prospects, that this region is on track for revitalization," CEO Gunther Braum said. Given Rofin-Sinar's rock-solid balance sheet and cheapish forward P/E, betting on that upturn seems safe enough.
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