Another quarter of stable growth for the laser manufacturer IPG Photonics

IPG Photonics Inc. (IPGP) released its first-quarter earnings report. The company is steadily improving its financial performance at a moderate pace, as well as diversifying production. In the last quarter ended March 31, IPG Photonics revenue increased by 7% year-on-year to $370 million, while net profit amounted to $69.6 million. Earnings per diluted share increased by 4% to $1.31.

Financial indicators managed to improve despite the pressure factors. Thus, sales of high-power lasers fell by 2% due to lower demand in China. IPG Photonics has also begun to reduce its production dependence on one of the major markets. Nevertheless, the decline was offset by diversification and record demand for lasers for automotive production. A lot of people in the automotive industry are now using laser welding because it is more efficient and has a better finish.

This is a long-term trend, which is a positive signal for IPG Photonics investors. Good dynamics are maintained in the materials processing segment (which includes 3D printing, welding, marking, etc.). In the last quarter, revenue in this segment grew by 7% and accounted for 92% of total revenue. Solutions for medicine and sales of new solutions made up another 36% of the total revenue.

Geographically, sales increased in Europe by 27% and in North America by 5%. In Japan, the increase was 18%, and in China, sales decreased by 7%. IPG Photonics continues multi-level diversification. The company enters the markets of different countries and also offers lasers for areas where they have not been used before. In the second quarter, IPG Photonics expects revenue of $355—$385 million and earnings per diluted share of $0.95—$1.25.