By Melinda Rose, Senior Editor
IRVINE, Calif., Aug. 4, 2011 — On Wednesday Newport Corp. became the third laser company in the past week to report impressive results for the quarter, joining IPG Photonics and Coherent Inc., which both set all-time revenue highs.
Newport reported record quarterly sales of $130 million and a profit of $14 million, or 36 cents a share. The company's sales for the second quarter were up 13.6 percent year over year, and sales for the first half of the year were up 16.6 percent in comparison to the first half of 2010, to nearly $259 million.
"Our sales in the second quarter were the second-highest level we have achieved in any quarter in our history," said Newport President and CEO Robert J. Phillippy.
Coherent posted a third-quarter profit of $19 million last week, driven by strong sales in the microelectronics market — including the first bookings of a record $77 million display order. Its $210 million in revenue for the quarter was a new record for the company (See: Flat Panel Orders Drive Coherent Profits). IPG Photonics said strong demand for high-power and pulsed fiber lasers for materials processing applications such as marking, welding and cutting made its second-quarter revenue surge up 81 percent year over year to $122 million, also a record. The company's profit for the quarter tripled to almost $31 million, or 63 cents a share (See: IPG Photonics’ Profit Triples in Q2), over the same quarter a year ago.
The earnings were the first posted by Newport since it announced in July that it will acquire High Q Technologies of Rankwell, Austria, and Jerusalem-based Ophir Optronics (See: Newport Buying High Q and Newport to Acquire Ophir Optronics). Newport completed its High Q acquisition on July 29; the deal with Ophir is expected to close in the fourth quarter of 2011.
Newport said its $143.7 million in orders for the second quarter of 2011 was driven primarily by significantly increased demand from customers in the microelectronics, scientific research, aerospace, and defense and security markets. Included in the microelectronics sector's $57 million total was a laser order of nearly $15 million from a semiconductor OEM that is scheduled to ship over the next three years.
"Even without this order, our orders from customers in this market would have exceeded $40 million for the sixth consecutive quarter," Phillippy said Wednesday in an earnings call with analysts and investors.
Reflected in the quarter's financials was the first direct impact on revenue from Japan's huge earthquake and tsunami in March. Laser operating income for the past two quarters had a profit margin of 10 percent, which was down to 9 percent for the second quarter, with laser sales down about $1.7 million sequentially, Newport CFO Charles F. Cargile said.
"We are very, very strong in Spectra Physics lasers in Japan. And the disruption that occurred in March in orders, and carried into the first part of Q2, had a significant impact on the revenue," Cargile said in the earnings call. He added that orders in Japan, not revenue, took a hit in the first quarter, because the natural disaster hit with only one week left in the quarter. "So we shipped about $12 million in revenue in Japan in Q1, and that was down about 35 percent in the quarter," he said, with that $4 million reduction "hard to overcome with the other parts of the business."
Looking ahead, the company said it expects sales in the third quarter, excluding Ophir, to be in the range of $131 million to $135 million, and expects its sales to increase sequentially in the fourth quarter of 2011, resulting in record sales of more than $530 million for the year.
The company said it also expected a softening in the semiconductor capital market, something other companies in the industry have also been reporting.
For more information, visit: www.newport.com