IPG Photonics (NASDAQ: IPGP) reported Q2 EPS of $2.21, $0.04 worse than the analyst estimate of $2.25. Revenue for the quarter came in at $413.6 million versus the consensus estimate of $418.61 million.

GUIDANCE:

IPG Photonics sees Q3 2018 EPS of $1.80-$2.05, versus the consensus of $2.27. IPG Photonics sees Q3 2018 revenue of $360-390 million, versus the consensus of $424.9 million.

"Book-to-bill was at 1.0 for the quarter. While orders grew slightly on a year over year basis, order flow was below our target as demand softened in Europe and China at the end of the quarter. 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. 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." said Dr. Gapontsev.

For the third quarter of 2018, IPG expects revenue of $360 million to $390 million. The Company expects the third quarter tax rate to be approximately 26%, excluding effects relating to equity grants. IPG 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. 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% to 9%." added Dr. Gapontsev.

As discussed in more detail in the "Safe Harbor" passage of this news release, actual results may differ from this guidance due to various factors including, but not limited to, product demand, order cancellations and delays, competition, tariffs, trade policy changes and general economic conditions. This guidance is based upon current market conditions and expectations, and is subject to the risks outlined in the Company's reports with the SEC, and assumes exchange rates relative to the U.S. Dollar of Euro 0.86, Russian Ruble 63, Japanese Yen 111 and Chinese Yuan 6.62, respectively.

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