IPG reports 41% profit decline as trade war continues
Photo | Grant Welker
The Oxford headquarters of IPG Photonics
Oxford manufacturer of high-power lasers IPG Photonics is far behind its pace last year, reporting a 12% decline in revenue and more than a 40% decline in profit for both the second quarter and first half of 2019 amid a challenging geopolitical environment.
The company said it took in $363.8 million for the quarter, a 12% dip from the same period last year. The impact on profit was even greater, with the company netting $72.3 million compared to $121.6 million for last year’s quarter, a 41% decline.
For the first half of the year, the company has made $127.4 million in profit after reporting $228 million at this point last year, a 44% decline.
CEO Valentin Gapontsev in a statement with the earnings report said the results were still in the upper half of the company’s guidance range despite macroeconomic and geopolitical environments eating into the company’s bottom line.
The company has said the ongoing trade war with China and escalating tariffs have been the main factor in the company’s decreased performance.
"We continue to meet competitive challenges by substantially reducing component and manufacturing costs while enhancing existing products and introducing new solutions that improve productivity and increase flexibility for our customers," Gapontsev said in a statement.
The company was expecting a stronger 2019, but the U.S.-China trade conflict has only escalated, Gapontsev said.
For the quarter, sales decreased in every region except North America by at least 10%. In North America, sales increased 34%.
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