What's happening: Shares of IPG Photonics (NASDAQ:IPGP) were up about 12% as of 10:15 a.m. Tuesday after the laser maker reported favorable second-quarter financial results this morning. Sales posted a 22% gain from year-ago levels, reaching $235.1 million, and earnings of $1.15 per share topped the consensus estimate by $0.04 per share.
Why it's happening: IPG Photonics has consistently produced solid growth throughout its business, and this quarter was no exception. Sales of the company's key high-power fiber lasers rose 27%, and IPG Photonics also reported gains in its other lines of laser products. The laser maker also enjoyed a 21% jump in revenue from materials processing, and sales from other applications such as medical devices and telecom soared by more than half from year-ago figures.
IPG Photonics also gave encouraging guidance for the third quarter. The laser maker now expects revenue to be within a range of $235 million to $250 million, and it projected earnings of between $1.15 to $1.30 per share. Both ranges represent an improvement over what investors were expecting before the report, helping to contribute to the overall optimism surrounding the company's stock.
Perhaps the most important piece of news for IPG Photonics, though, was that Asia was the company's strongest region during the quarter. Recently, the stock has lost about 20% of its value as worries about the Chinese economic slowdown had led to speculation that IPG Photonics might lose a substantial amount of business from the region. Yet for now, the numbers suggest otherwise, and IPG Photonics remains laser-focused on finding new opportunities to expand its reach into the red-hot laser market worldwide and to support its future growth.