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Jul 03, 2022
Cognex Q2 2022 Earnings Report
Cognex's Q2 2022 results were impacted by a fire at a contract manufacturer and slower spending in factory automation.
Key Takeaways
Cognex reported Q2 2022 revenue of $274.63 million, a 2% increase year-over-year. Net income was $58.90 million, a 24% decrease year-over-year, impacted by a $17.4 million charge related to a warehouse fire. The company is facing supply disruption and lower spending on automation projects.
Revenue increased by 2% year-over-year, but decreased by 3% from Q1-22.
Gross margin was 72%, compared to 75% in Q2-21 due to higher component costs.
A fire at the primary contract manufacturer's site resulted in a $17.4 million charge.
The company expects Q3-22 revenue to be between $160 million and $180 million due to supply disruption and lower e-commerce logistics revenue.
Cognex
Cognex
Forward Guidance
Cognex expects Q3 2022 revenue to be between $160 million and $180 million, with a gross margin of about 70% and an effective tax rate of 16%.
Positive Outlook
- The combined total of expenses for RD&E and SG&A, which excludes the loss from the fire, is expected to decline by low-single digits on a sequential basis due primarily to lower variable incentive compensation.
- The effective tax rate is expected to be 16%, excluding discrete tax items.
Challenges Ahead
- Revenue for Q3-22 is expected to decline both year-on-year and sequentially.
- Decline is due to the estimated impact of the supply disruption caused by the June fire at the company’s primary contract manufacturing site and lower expected revenue from e-commerce logistics.
- Gross margin for Q3-22 is expected to be about 70%, which is below the company’s mid-70% long-term target.
- Lower gross margin is due to pressure from the lower expected revenue level and higher inventory purchase prices, including broker premiums, as the company works to replenish inventory destroyed by the fire.