February 12, 2019

IPG increased profits 16% in 2018

Photo | Grant Welker
The Oxford headquarters of IPG Photonics.

Oxford laser manufacturer IPG Photonics was able to weather the storm of tariffs and other political factors and record a 16-percent growth in profits for 2018 despite a 9-percent decline in fourth quarter revenue.

The company said it made revenues about $1.46 billion for the year after $1.4 billion last year despite tariffs and geopolitical factors like Chinese tariffs leading to fourth quarter revenues declining 9 percent to $330 million from the $361.1 million reported last year.

Despite those modest revenue figures, profit for the fourth quarter and year both increased by 43 percent and 16 percent to $75.6 million and $404 million, respectively.

The company has cited tariffs and trade tensions with other countries when it has disappointed Wall Street with its financial reports.

"Despite further weakening of the macroeconomic climate in our largest markets, we were able to deliver results in line with our guidance," CEO Valentin Gapontsev said in a press release.

That weakening includes more competitive pricing in China and elsewhere abroad.

In the financial announcement, IPG Photonics said its project backlog was $712 million, a 4-percent year-over-year decrease.

The company's stock price has tumbled this year from a high of $261 to just $137 at Monday's close. On Tuesday, that price rose to $148.

Gapontsev himself faces a challenge hurting the company. The U.S. Treasury is listing the Russian-born U.S. citizen as a Russian oligarch, which the company says is causing some customers to look elsewhere for products. Gapontsev has sued the Treasury to be removed from the list.

The company made no mention of that issue in its press release.

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