02 Feb 2012
Shares in the laser company fall sharply in early trading after sales dip 22% sequentially.
Industrial laser company Rofin-Sinar saw 15% of its value wiped out in early trading on February 2 after the release of the results for its first fiscal quarter of 2012, which ended December 31.
Last November, Rofin’s CEO Günther Braun warned of an impending slowdown in demand from machine tool customers in China. That came true in the latest period, with sales of $131.6 million down 22% on a sequential basis – albeit from record-breaking levels – as a result of familiar macroeconomic challenges in both China and Europe. Rofin had issued sales guidance of between $137 million and $142 million for the quarter.
“Lower demand came in particular from the machine tool and electronics industry, while laser sales for applications in the semiconductor and medical device industries improved slightly,” Braun said, adding that Rofin saw around $10 million of its orders scheduled for the December quarter pushed back by three months – a much higher level than is normally the case and largely attributable to Chinese machine tool customers delaying shipments of CO2 lasers.
However, the CEO believes that the Chinese market hit bottom in the December quarter, and will now start to pick up following the country’s new year celebrations last week.
Fiber laser backlog
Braun also reported good demand for fiber lasers, which are steadily eating into the global CO2 laser market share. In fiscal 2011, Rofin made around $42 million in sales of fiber lasers, and although the opening quarter of fiscal 2012 saw a similar level, the company is continuing to invest heavily in their development and expects to double sales to around $80 million this year as a result.
Braun said that Rofin has more than 50 fiber laser units currently in its order backlog, for lasers operating at between 1 kW and 4 kW output power, with cutting applications accounting for the highest proportion of that demand.
With positive signs also emerging from the medical device market, where ultrashort pulsed lasers are starting to make an impact, and – perhaps surprisingly – in the solar photovoltaic sector, Rofin’s management is confident that a slow start to fiscal 2012 will be recovered in the second half of the year.
For the second quarter, it is predicting that sales will be relatively flat, but with orders likely to gain momentum from now on, Braun and colleagues believe that full-year revenues will reach between $550 million and $570 million. Although that would still be down on the record-breaking 2011 figure of $598 million, this was swelled by a bumper first-half in the cyclical semiconductor business.
On the bottom line, Rofin reported a net income of $8.2 million – down from nearly $15 million a year ago and reflecting a significant change in product mix away from high-power CO2 lasers, which are more profitable for the company to sell.
Of 1065 lasers sold by Rofin in the December quarter, only 367 were assigned as “macro” tools, compared with 698 lower-margin lasers for marking and micro applications. Last year, the figures were a much closer 454 and 621 respectively.
Despite the disappointing figures, Braun assured analysts taking part in an investor call that no orders for lasers had been cancelled. Insisting that the recent slowdown was “no repeat of the 2008/2009 situation”, he pointed out that the company’s order backlog was at a similar level this time last year.
Markets still reacted negatively to the financial results, with Rofin’s stock slumping 15% in early trading following the announcement.