Tuesday, November 11, 2014

Cognex Earnings Review

Cognex Corporation (NASDAQ: CGNX  ) did pretty much what it had said it would do in its bumper third quarter. However, on closer inspection, there is one number that suggests its full-year earnings growth is going to be stronger than many think. It's time to look in more detail at the earnings, and the commentary on the earnings call.

Cognex reports record earnings Readers should note that there is an earnings preview of Cognex on the Motley Fool website that outlines the key things for investors to look for. Now to the numbers:

  • Third-quarter revenue of $169.4 million vs. analyst expectations of $168.2 million, and internal guidance of $165 million-$170 million.
  • Third-quarter non-GAAP adjusted diluted EPS of $0.59 vs. analyst expectations of $0.56.
  • Gross margin of 74% vs. internal expectations of a mid-70% range.
  • Effective tax rate of 19% vs. internal expectation of 19%.
  • Fourth-quarter revenue guidance of $111 million-$114 million vs. analyst expectations of $113 million.
  • Fourth-quarter gross margin guidance as being similar to the third quarter, at 74%.

The revenue is at the top of the internal range and above analyst estimates, while EPS is clearly ahead. Gross margin and the tax rate were in line, and the revenue guidance for the fourth quarter is pretty much in line with analyst expectations. So where is the upside that I mentioned in the lead?


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