A Clear-Sighted View of This Vision Leader's Earnings

October’s coming to an end. That means we’re right in the middle of another earnings season, which means there’s a lot happening in the markets these days. In today’s blog, we’re going to jump right into the fray and take a look at yesterday’s earnings from one of my favorite companies on the market right now…

Cognex Corporation (CGNX) is a leading provider of vision systems, software and sensors, as well as industrial barcode reader systems. The company’s products are used to streamline the manufacturing process by capturing and analyzing information in order to automate tasks. Cognex’s products also help detect defects, guide assembly lines and monitor production lines.

The company was founded in 1981, and it’s headquartered in Natick, Massachusetts. It provides machine vision products that capture and analyze visual information to automate tasks primarily in manufacturing processes. Cognex develops, manufactures, and markets machine vision products used to automate the manufacture and tracking of discrete items, such as mobile phones, aspirin bottles, and automobile tires by locating, identifying, inspecting and measuring them during the manufacturing or distribution process.

Its products include VisionPro, which is a software suite providing various vision tools for programming and three-dimensional application. CGNX’s In-Sight vision systems perform various vision tasks, including part location, identification, measurement, assembly verification and robotic guidance. Its checker vision sensors perform single-purpose vision task and ID products, which are used for reading codes applied on discrete items during the manufacturing process. This also has applications in logistics automation for package sorting and distribution, as well as DataMan ID readers.

The company sells these products through a direct sales force and through a network of integration and distribution partners worldwide.

Cognex Corporation revealed its earnings and sales results for the third quarter after the stock market closed on Monday. Total sales during the quarter rose 75.6% year-over-year to $259.7 million, topping analyst estimates of $256.38 million. Adjusted earnings per share came in at $1.14. The analyst community was looking for earnings of $1.04 per share, so in addition to a 1.3% sales surprise, Cognex posted a 9.6% earnings surprise. The company described the third-quarter as a “spectacular quarter” with record-breaking revenue.

Looking ahead to the fourth quarter, the vision systems manufacturer expects revenue between $170 million and $180 million. This estimate is below third-quarter due to the timing of larger orders from the consumer electronics industry, but still represents 31% to 39% annual sales growth. The company’s fourth-quarter estimate is above the current consensus estimate, which looks for revenue between $145 million and $161 million. Thanks to the earnings beat and solid forward-looking guidance, CGNX shares bounced about 4% in after-hours trading.

If all this makes you curious about A-rated Cognex Corporation, then I urge you to join my Blue Chip Growth service today. My Blue Chip Growth members know the exclusive Buy Below price for CGNX, and they’ve already turned a quick 19% profit on it in under three months, with much more room to run in the months to come.

But if you aren’t ready to join Blue Chip Growth today, I urge you to stay tuned into this blog. We’ll continue analyzing the earnings results of some of my favorite companies throughout this season.

Sincerely,

signed: Louis Navellier

Louis Navellier

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