Cognex reports third quarter, beats the Street despite declines
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Cognex reports third quarter, beats the Street despite declines

Machine vision expert Cognex reported declines in revenue and earnings for its third quarter – the result of significantly lower revenue from its OLED display and smartphone manufacturing customers. This was always on the cards, and Cognex had warned investors about it in the previous quarter. As a result, despite reporting a 13% decline in revenue a 24% decline in earnings, Cognex logged a solid beat against analysts’ expectations on both metrics.

Cognex’s share price has risen by 11% over the last five days

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Source: Yahoo Finance

For its third quarter Cognex said that revenue came in at $232 million. That’s a decline against the year-ago quarter, but easily beat consensus estimates of $227 million, as well as the company’s own guidance ($230 million). Net income of $80 million resulted in earnings of $0.39 – again, a year on year decline, but better than analysts had hoped for ($0.39). The cause for these declines was a combination of higher than normal levels of inward investment, and tough comparables in the third quarter of 2017.

That inward investment may have harmed Cognex’s figures, but the company is ploughing money into research and development in an attempt to future-proof its business. Its investment includes new products as well as its sales force, and, according to the company, will lead to long-term growth.

Robert J. Willett, Cognex’s CEO, said: "I am pleased with the substantial revenue growth and operating margin expansion that we achieved on a sequential basis. More importantly, we accomplished significant company objectives that are expected to set us up for long-term growth."

Disclosure
Dominion holds Cognex in its Global Trends Managed Fund.


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