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Cognex (CGNX) Q2 Earnings Miss Estimates, Revenues Up Y/Y

·3-min read

Cognex CGNX reported second-quarter 2022 non-GAAP earnings of 41 cents per share, which missed the Zacks Consensus Estimate by 2.38% and declined 5% year over year.

Revenues of $274.63 million beat the consensus mark by 0.13%. The top line increased 2% year over year.

The top line and non-GAAP earnings were negatively impacted primarily by losses incurred due to damage by fire at Cognex’s primary contract manufacturer’s factory in Indonesia.

This resulted in loss of large portion of the company’s component inventory and a net non-cash charge of $17.4 million in Q2 which was not covered by insurance.

Cognex Corporation Price, Consensus and EPS Surprise

Cognex Corporation Price, Consensus and EPS Surprise
Cognex Corporation Price, Consensus and EPS Surprise

Cognex Corporation price-consensus-eps-surprise-chart | Cognex Corporation Quote

Quarterly Details

The top line growth was impacted positively due to strong demand by customers from consumer electronics industry. However revenue from the logistics industry declined heavily both year-on-year and sequentially due to lower spending on automation projects for new fulfillment centers.

Sales surged 20% in Asia and 13% in Europe year over year. Meanwhile, the same declined 16% in America.

Gross margin was 72% in the second quarter of 2022 which declined by 300 bps from the year ago quarter due to increasing costs incurred to procure electronic components through brokers.

RD&E and SG&A margins were 12% and 29%, respectively, in the second quarter of 2022, which is in line with the figures reported in the year-ago quarter.

Non GAAP Operating margin came in at 30%, increasing by 400 bps from the year-ago quarter.

Balance Sheet & Cash Flow

As of July 3, 2022 Cognex had $788 million in cash and investments compared with $794 million as of April 3, 2022. The company has no debt.

Cognex generated $94 million in cash from operations in the second quarter of 2022 compared with $50 million in the previous quarter.

Guidance

For third-quarter 2022, Cognex anticipates revenues to be between $160 million and $180 million. Earnings are projected between $1 per share and $1.30 per share.

Gross margin for Q3-22 is expected to be about 70%, which is below the company’s mid-70% long-term target due to lower expected revenue level and higher inventory purchase cost which includes broker premiums as the company is looking to replenish inventory destroyed by the fire.

Zacks Rank & Stocks to Consider

Cognex currently carries a Zacks Rank #3 (Hold).

Cognex’s shares have tumbled 44.3% compared with the Zacks Computer and Technologysector’s decline of 22.7% in the year-to-date period.

Here are some better-ranked stocks worth considering in the broader sector.

Asure Software ASUR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ASUR’s shares have decreased 30.2% in the year-to-date period compared with the Zacks Internet - Delivery Services industry’s decline of 6%. ASUR is scheduled to report second-quarter 2022 results on Aug 8.

Blink Charging BLNK carries a Zacks Rank #2.

BLNK’s shares have fallen 16.5% in the year-to-date period compared with the Zacks Electronics - Miscellaneous Servicesindustry’s decline of 14.7%. Blink is scheduled to report second-quarter 2022 results on Aug 8.

Angi ANGI carries a Zacks Rank #2.

ANGI’s shares have slumped 36.6% in the year-to-date period compared with the Zacks Internet - Content industry’s decline of 31.8%. ANGI is scheduled to report second-quarter 2022 results on Aug 9.


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