IPG profits drop 47%, as revenues fall $67M

Photo | Grant Welker IPG Photonics is expanding its Oxford office campus.

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Oxford laser manufacturer IPG Photonics reported a $67-million drop in revenue in the quarter ending in June, continuing financial struggles for the company predating the coronavirus pandemic.

IPG was still profitable despite what it cited as challenges related to the pandemic, although it profits fell 47% to $38.2 million from $72.3 million in the second quarter of 2019. Earnings per share decreased to 71 cents.

IPG was among the first Central Massachusetts corporations to report a hit from the outbreak when it was still largely limited to China early in the year. In February, the company announced a 7% revenue decline and said it expects roughly $45 million in reduced revenue from the outbreak. Its first-quarter finances, reported in May, showed a $66 million, or 21%, drop in revenue.

In February, IPG reported revenue for last fiscal year down 10% year-over-year to $1.3 billion. Last October, it announced plans to cut 300 jobs and cost savings equal to $30 million a year, a decision made amid an expansion of the company's Oxford headquarters.

Second-quarter results exceeded the company's projections due to better than expected performance in China and strength in new products, Dr. Valentin Gapontsev, IPG's CEO, said in a statement.

"We continue to believe that our strong balance sheet and free cash flow provide us ample flexibility to respond to business disruptions and emerge from the pandemic in a stronger competitive position," Gapontsev said.

IPG's stock fell along with the rest of the market in March but has since reached highs last seen in 2018. Stock prices on the Nasdaq fell about 10% on the earnings report news Tuesday morning, from a close Monday of $180 a share to $162 a share late morning Tuesday.

IPG's forecast for the third quarter mostly calls for continued struggles, with revenue between $280 million to $310 million.