Cognex Shares Slide On Missing Q2 Earnings Consensus, Q3 Revenue Outlook Trailing Consensus

Cognex Shares Slide On Missing Q2 Earnings Consensus, Q3 Revenue Outlook Trailing Consensus

Cognex Corporation CGNX reported second-quarter revenue growth of 2% year-over-year to $274.63 million, missing the consensus of $276.59 million. Adjusted EPS was $0.41, missing the consensus of $0.42.

The gross margin declined to 72% compared with 75% in 2Q21. Operating income decreased 29.6% Y/Y to $65.14 million, and margin fell by 1,068 bps to 23.7%.

As of July 3, 2022, Cognex held $788 million in cash and investments and no debt. Year-to-date, Cognex generated $94 million in cash from operations.

The company spent $154 million to repurchase its common stock and paid shareholders $23 million in dividends.

“While we reported revenue for Q2 in the middle of our guidance range, we are experiencing disruption in our business today. A large amount of our component inventory was destroyed in a June fire at our primary contract manufacturer’s site.”

“We also observe certain customers scaling back spending on new e-commerce fulfillment centers after two years of heavy investment that benefitted Cognex,” commented Robert J. Willett, Chief Executive Officer of Cognex.

Cognex recorded a non-cash net charge of $17.4 million in 2Q22, which consisted of gross losses totaling $44.9 million, less estimated insurance recoveries of $27.5 million.

3Q22 Outlook: Cognex expects revenue of $160 million and $180 million vs. a consensus of $290.25 million and a gross margin of ~70%.

Price Action: CGNX shares are trading lower by 13.70% at $42.89 during the post-market session on Tuesday.

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