Profits down 18% at IPG Photonics, $300M stock repurchase program launched

Photo | Grant Welker IPG Photonics' former headquarters in Oxford.

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By Laura Finaldi

Profits at IPG Photonics fell by 18% in the second quarter, and the Oxford fiber lasers manufacturer said it is launching a new, $300 million stock repurchase program.

In its second quarter financial results released Tuesday, IPG Photonics reported a drop in net income, with its quarterly profit falling from $69.8 million in the same time period last year compared to $57 million in 2022. Year-to-date, net income is down 8%, from $137.9 million last year to $126.5 million from January through June of this year.

Revenue for the second quarter was $377 million, up from $371.7 million during the same period in 2021. Year-to-date revenue was up 4%, from $717.2 million for the first six months in 2021 to $747 million this year.

IPG’s board of directors has authorized a new program to purchase up to $300 million of common stock. The buyback follows $312 million stock repurchase in the first half of the year.

Exchange rates slowed IPG’s revenue growth in the second quarter, the company said, reducing it by about $18 million on a constant currency basis. Emerging growth products made up 40% of total revenue, and sales in other applications increased by 29%, driven by the strength in the medical market.

Revenue for high power continuous wave lasers fell by 14% year-over-year, which the company said was because of lower demand in high-power cutting applications in China. That loss was partially offset by strong growth in welding and cutting applications in North America and Japan, IPG said.

Shares of IPG opened at $108.46 per share on the Nasdaq on Tuesday morning, about an hour after the earnings were made public, but closed for the day at $102.69. As of closing Thursday, IPG’s share price had hit $103.51.