Cognex Corporation (CGNX), a provider of machine vision products, has announced a 54.27 percent jump in profit for the quarter ended Jun. 29, 2014, on the back of strong improvement in sales and margins. The company earned $25.95 million or $0.29 a share in the second-quarter compared with $16.82 million or $0.19 a share a year ago.
Adjusted earnings per share came in at $0.32 a share, when analysts expected $0.22 a share.
Revenue during the second-quarter climbed 25.77 percent to $108.80 million from $86.51 million in the last year period.
Gross margin expanded by 74 basis points over the last year period to 76.30 percent. Total expenses as a percentage of revenues decreased to 71.76 percent from 76.68 percent in the same period last year. That has resulted in improvement of 492 basis points in operating margins to 28.24 percent.
The company reported operating income of $30.72 million, compared with $20.17 million in the previous year period.
"What a quarter!" exclaimed Robert J Shillman, chairman of Cognex. "Our record-breaking financial results were above our expectations. We were highly profitable and delivered record earnings per share even with continued investments in engineering and sales to drive future growth."
"Our second quarter performance was outstanding," said Robert J Willett, chief executive officer of Cognex. "The strong upward momentum in our business is driven by past investments we made in our technology and sales team. It’s gratifying to see our hard work deliver these great financial results. Even more exciting is the substantial growth that we expect to report for Q3."
The company expects the third quarter revenues to be in the range of to $165 - $170 million. Gross margin is expected to be in the mid-70% range, slightly lower than in recent quarters, it said.
Cash Flow
Cognex Corp has generated cash of $31.71 million from operating activities during the first half, down 18.65 percent or $7.27 million when compared with the last year period. The company has generated 15.88 cents of operating cash flow in every sales dollar for the first half, down from 23.28 cents in the same period last year.
The company has spent $17.81 million cash to meet investing activities during the first half, as against cash outgo of $42.63 million in the last year period. It has made net capital expenditure of $5.34 million during the first half, which was higher by 23.92 percent or $1.03 million, from a year ago.
The company's free cash flow accounted for 83.16 percent of operating cash flow for the first half, compared with 88.94 percent in the last year period.
The company has spent $14.50 million from financing activities during the first half, as against cash inflow of $7.12 million in the last year period. It has spent net of $17.98 million on repurchase of common stocks.
As on Jun. 29, 2014, the company's cash balance stood at $40.17 million, down 16.09 percent or $7.70 million from Jun. 30, 2013.
Working Capital
Cognex Corp has witnessed a decline in the working capital over the last one year. The company's working capital stood at $194.11 million as at Jun. 29, 2014, down $33.95 million or 14.88 percent from $228.06 million on Jun. 30, 2013. It registered a decrease in current ratio to 3.62 as at Jun. 29, 2014 from 5.64 on Jun. 30, 2013.
Shares of the company fell $0.16 or 0.42 percent to close at $37.80 on Monday.
