IPG Q4 Profit Up 9 Percent
OXFORD, Mass., Feb. 24, 2009 – Fiber lasers and amplifiers maker IPG Photonics Corp. has reported that its net income for 2008 increased by 23 percent, to $36.7 million, compared with $29.9 million last year, while net income for the fourth quarter increased by 9 percent over one year ago.
IPG said its revenue growth continues to be driven by strong sales of its fiber lasers used for materials processing applications, which increased for the quarter by 16 percent over a year ago, to $45.6 million. Revenue for 2008 increased by 21 percent to $229 million, up from $188.7 million in 2007. Earnings per share increased 11 percent to 20 cents, up from 18 cents a year ago.
“The materials processing end market continued to represent the majority of our sales and the greatest growth driver in the quarter, accounting for 78 percent of revenues,” said IPG CEO Dr. Valentin Gapontsev. “High-power laser sales continued to be very strong, growing 32 percent on a year-over-year basis and representing 43 percent of fourth-quarter revenues. As expected, sales of pulsed lasers, which are used primarily for marking and solar photovoltaic manufacturing applications, slowed in the quarter due to weakening demand from our customers.”
Gapontsev said IPG continues to see market strength in Germany, where the company increased fourth-quarter sales by 48 percent year-over-year, and in Japan, where it saw sales growth of 25 percent.
“Despite the strength in Japan, overall sales to Asia were down 10 percent as a result of weakness from marking applications in China. Overall sales in Europe and the rest of the world were up, with North America relatively flat for the quarter,” he said.
In response to market conditions caused by the global economic recession, Gapontsev said the company is working to save $4 million to $6 million a year by freezing new hiring, cutting overtime, curtailing bonuses, reducing its work force through attrition and implementing tighter controls over spending. It also is lowering the cost of its products by making components less expensive. The company is doing that by producing several critical parts in-house that previously had been outsourced and through technological improvements, he said.
IPG will reduce its capital expenditures in 2009 by 50 percent to ensure it continues to have sufficient cash on hand. The company also is investing in new products to broaden its portfolio, such as green lasers, high-energy pulsed lasers and a new generation of ultrahigh-power lasers.
“In addition, we plan to expand into new markets and applications with the ongoing changeover from traditional laser technologies to our fiber lasers,” Gapontsev said.
For the first quarter of 2009, IPG Photonics expects revenues in the range of $45 million to $50 million. The company anticipates earnings per share in the range of 9 to 14 cents.
For more information, visit: www.ipgphotonics.com
See also: IPG's Revenue Up 29 Percent