IPG stock up 5 percent after U.S.-China agree to halt tariffs
Photo | Matt Pilon
The Oxford headquarters of IPG Photonics.
IPG Photonics, declining in value throughout the year due to trade relations, reported a five percent stock price increase Monday after the U.S. and China agreed to a 90-day truce on a back-and-forth tariff battle.
The White House announced Saturday President Donald Trump agreed to leave $200 billion in tariffs at the 10 percent rate and not raise it to 25 percent, and China has agreed to purchase a to-be-determined amount of agricultural, energy, industrial and other products from the U.S.
Chinese President Xi Jinping and Trump also agreed to begin talks to overhaul the trade agreement between the two countries, including intellectual property protection, non-tariff barriers, cyber theft, and service and agriculture.
If an accord can’t be reached within 90 days, the 10 percent tariffs will be raised to 25 percent.
on Tuesday, the company's stock reversed course and fell nearly 4 percent by 11 a.m.
Oxford-based IPG, a maker of lasers for a variety of industries, has repeatedly blamed the ongoing trade war with China as a leading factor for its reduced business outlook.
CEO Valentin Gapontsev said as much in a conference call in October discussing IPG’s third-quarter earnings.
“As noted in our preliminary earnings release, we believe tariffs and trade-related headwinds were the primary driver of weaker-than-expected performance for our business in China and Europe, where China is the main market for perfect European metal processing machines,” he said. “Indication from our customers suggest that the purchases of laser system in these regions are being pushed out. We believe uncertainty resulting from the ongoing U.S.-China trade conflict is reducing overall demand for industrial capital equipment purchases, predominantly in China.”
The company reported a 13 percent dip in third-quarter profits and a 9 percent decline in revenue.
Investors have taken notice of the company’s concerns on global trade, resulting in IPG’s market cap falling from around $14 billion earlier this year to just under $8 billion as of Tuesday.
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