Oxford, MA - IPG Photonics has reported financial results for the first quarter ended March 31, 2014, primarily driven by the company's high-power fiber lasers to yield a 20 percent year-over-year sales increase, according to CEO Dr. Valentin Gapontsev. "Gross margins at 52.3 percent improved from the sequential fourth quarter to within our target range and we grew our bottom line by 15 percent year-over-year," he says.
Related: IPG Photonics reports record revenue of $172.2M in 3Q13
"Materials processing sales grew 22 percent as demand continues to increase for cutting applications across a number of industries. In addition, some of the newer applications like additive manufacturing, which includes 3D printing, and glass cutting showed robust performance. While welding performed exceptionally well in Japan and to a lesser extent Europe, it was weaker in North America and China," says Gapontsev. "High-power fiber laser sales increased 33 percent and medium-power, QCW (quasi-continuous-wave), and laser systems sales also were up compared with the prior year. Geographically, we saw strong growth in Europe, China, and Turkey, and achieved record sales in Japan. North American sales were lower due to lower sales for welding and paint stripping, partially offset by strong cutting sales as compared to Q1 2013."
The company generated $43.4 million in cash from operating activities and grew its cash and cash equivalents balance to $480.6 million after using $11.5 million to finance capital expenditures during the first quarter, says Gapon.
"There are significant opportunities for IPG to continue to generate profitable growth through existing and new applications as well as product line expansion. Fiber laser technology continues to displace traditional laser technologies and non-laser technologies for applications such as cutting, welding, additive manufacturing, and cladding. The book-to-bill ratio was greater than one in the first quarter and cutting applications continue to expand nicely. However, softness in North American advanced and medical application orders and continued competition for low-power pulsed lasers in China will partially offset the expected Q2 growth from our high-power cutting, QCW, and our systems businesses. We have received a significant order in China for our new low-cost pulsed lasers and this should start to ship in Q2 improving our competitive position against the local suppliers. We believe that expected future traction from new product introductions will be a growth driver over the longer term. We will continue to make strategic investments to advance our industry-leading technology and address our customers' growing need for more efficient, faster and higher power laser solutions," concludes Gapontsev.
IPG Photonics expects revenue in the range of $173 to $188 million for the second quarter of 2014. The company anticipates earnings per diluted share in the range of $0.77 to $0.92 based on 52,724,000 diluted common shares, which includes 51,970,000 basic common shares outstanding and 754,000 potentially dilutive options at March 31, 2014.
(Image via Shutterstock)