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Sep 30, 2023
IPG Photonics Q3 2023 Earnings Report
IPG Photonics' Q3 2023 results were negatively impacted by weak industrial demand and lower e-mobility sales in China, but gross margin improved due to focus on manufacturing costs and efficiency.
Key Takeaways
IPG Photonics reported a 14% year-over-year decrease in revenue to $301 million for Q3 2023, impacted by weak industrial demand and lower e-mobility sales in China. Despite the revenue decline, gross margin improved to 44.1%. EPS decreased by 21% year over year to $1.16.
Third quarter revenue decreased 14% year over year to $301 million.
Gross margin improved to 44.1%, a 100 basis point increase year over year.
Earnings per diluted share (EPS) decreased 21% year over year to $1.16.
Sales decreased 28% in China and 13% in North America, but increased 3% in Europe and 41% in Japan year-over-year.
Forward Guidance
For the fourth quarter of 2023, IPG expects revenue of $270 million to $300 million and earnings per diluted share in the range of $0.80 to $1.10.
Positive Outlook
- Sales in China should recover with an increase in investment in EV battery capacity in 2024.
- Sales in the U.S. are likely to benefit from government investment and onshoring initiatives in the next several years.
Challenges Ahead
- Third quarter book-to-bill was below one due to continued economic uncertainty which is impacting industrial demand in China and Europe
- European customer activity and sentiment softened during the third quarter.
- General industrial demand in North America has held up better than expected, but many customers continue to predict a slowdown and are delaying purchase decisions, so our visibility is limited.
Historical Earnings Impact
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