High power CW laser sales accounted for 64 per cent of total revenue during the quarter and increased 20 per cent year-over-year. An even stronger growth of sales was seen in ultra-high-power CW lasers with powers of 6kW or above.
Materials processing sales, driven by strength in cutting and 3D printing applications, accounted for approximately 95 per cent of total sales and increased 11 per cent year-over-year. Sales to other markets increased 33 per cent year-over-year.
By region, sales increased 10 per cent in China, 18 per cent in Europe, 23 per cent in North America, and declined 2 per cent in Japan on a year-over-year basis.
‘We delivered record quarterly revenue and net income driven by the rapid adoption of IPG's high power products,’ commented IPG CEO Dr Valentin Gapontsev. ‘This more modest year-over-year growth in orders has persisted through July, and we believe is primarily driven by macroeconomic and geopolitical factors rather than competitive dynamics.'
‘We are seeing strong order activity in North America and some smaller regions,' he continued. 'Furthermore, we are beginning to benefit from rapid growth from new products, including ultraviolet, green, and ultrafast pulsed lasers, systems and beam delivery components. While we are encouraged by the strength in new products and select regions, this growth will only partially offset the more modest outlook in China and Europe.’
Despite orders growing slightly on a year-over-year basis, IPG’s order flow was below targets as demand softened in Europe and China towards the end of the quarter, Gapontsev added.
IPG generated $109 million in cash from operations during the quarter, and capital expenditures totalled $57 million. IPG ended the quarter with $1.13 billion in cash, cash equivalents and short-term investments, representing an increase of $9.6 million from 31 December 2017. Earnings per diluted share of $2.21 increased 16 per cent year-over-year.
For the third quarter of 2018, IPG expects revenue of $360-$390 million. The company also anticipates delivering earnings per diluted share in the range of $1.80 to $2.05, with 53.7 million basic common shares outstanding and 55.0 million diluted common shares outstanding.
‘As compared to just a few months ago, the current global macroeconomic trade and geopolitical environment is more uncertain and could remain so,' added Dr Gapontsev. 'In addition, we expect foreign exchange to be more of a headwind, particularly with the depreciation of the Chinese Renminbi over the last month. As such, we believe full year revenue growth for 2018 will be in the range of 7-9 per cent.’
IPG's board of directors has authorised a new $125 million anti-dilutive stock repurchase programme following the completion of its previous $100 million repurchase programme. Under the new anti-dilutive programme, IPG management is authorised to repurchase shares of common stock in an amount not to exceed the greater of: The number of shares issued to employees and directors under the company's various employee and director equity compensation and employee stock purchase plans from 1 January 2018 through 31 March 2019; and $125 million, exclusive of any fees, commissions or other expenses.