Why Shares of IPG Photonics Crashed Today
Oct 31st 2012 6:39PM
Updated Oct 31st 2012 7:04PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of high-tech manufacturer IPG Photonics (NAS: IPGP) fell 12%, after delivering a disappointing earnings report.
So what: Third quarter revenue rose 21% to $156.4 million and earnings per share were $0.81, both ahead of estimates. But guidance often trumps the previous quarter, and IPG doesn't seem to think the fourth quarter will be as good as analysts do. In the quarter, the company sees revenue of $140 million to $150 million, and earnings of $0.65 to $0.75 per share. Analysts had expected revenue of $155.7 million, and earnings of $0.81 per share.
Now what: The guidance miss was more than enough to knock down shares today. But, before you throw out the stock for the guidance numbers, remember that operations continue to improve, even if management sees a tough fourth quarter due to the macro environment. Shares are now trading at 16 times forward earnings estimates and, if shares fall a little further, the stock could be a great value for the long-term investor.
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The article Why Shares of IPG Photonics Crashed Today originally appeared on Fool.com.Fool contributor Travis Hoium has no positions in the stocks mentioned above. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. The Motley Fool owns shares of IPG Photonics. Motley Fool newsletter services recommend IPG Photonics. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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