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Dec 31, 2019
Cognex Q4 2019 Earnings Report
Cognex faced challenges due to deterioration of business conditions in industrial markets and reported a decline in both revenue and profitability.
Key Takeaways
Cognex's Q4 2019 revenue was $169.8 million, a 12% decrease from Q4 2018. Net income was $80.3 million, or $0.46 per diluted share, compared to $45.4 million, or $0.26 per diluted share, in Q4 2018. The effective tax rate was (250)% due to discrete tax items that resulted in a tax benefit of $61 million.
Revenue decreased by 12% from Q4-18 and 7% from Q3-19.
Gross margin was 74% for Q4-19 compared with 73% for Q4-18 and 74% for Q3-19.
The effective tax rate was (250)% in Q4-19, 7% in Q4-18, and 12% in Q3-19.
Cognex recorded discrete tax items in Q4-19 that together resulted in a tax benefit of $61 million.
Forward Guidance
Revenue for Q1-20 is expected to be between $155 million and $170 million. Gross margin is expected to be in the mid-70% range, similar to the gross margin reported for Q4-19. Cognex expects operating expenses in Q1-20 to be relatively flat with Q4-19 and to increase by approximately 10% over Q1-19. The effective tax rate is expected to be 19% before discrete tax items compared to 16% in 2019.
Positive Outlook
- Gross margin is expected to be in the mid-70% range, similar to the gross margin reported for Q4-19.
- Operating expenses in Q1-20 are expected to be relatively flat with Q4-19.
- Growth in logistics is expected to partially offset the decrease in revenue.
- Cognex intends to continue to repurchase shares of its common stock, subject to market conditions and other relevant factors.
- Cognex's financial position as of December 31, 2019 continued to be strong, with $845 million in cash and investments and no debt.
Challenges Ahead
- Revenue for Q1-20 is expected to be between $155 million and $170 million, a decline from both Q4-19 and Q1-19.
- Continued weakness in automotive is expected to contribute to the decrease in revenue.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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