As expected, Cognex (CGNX) reported a decline in the bottom and top line numbers for the third quarter sending the shares into the negative territory during the extended market hours on Monday.
The maker of barcode readers’ revenue dropped 13% year-over-year to $232 million and non-GAAP profit per share slumped 24% to 39 cents in the recently ended quarter. GAAP EPS dropped 21% to 45 cents.
For the fourth quarter of 2018, Cognex expects revenue to be between $180 million and $190 million. At the mid-point, this outlook is lower than the company’s long-term growth target due to both the slower spending by customers in China and a lingering headwind from last year’s high level of investment by the large OLED display and smartphone manufacturers.
“While we are pleased with our Q3-18 results, slower spending trends that we are experiencing in China have reduced our revenue outlook for Q4-18,” said CEO Robert Willett.
Research, Development & Engineering expenses increased 14% from the prior year, due to Cognex’s investment in engineering resources for new product development. Selling, General & Administrative expenses increased 8% due to continued investments in sales resources as well as higher commissions and travel expenses.
Cognex increased its quarterly cash dividend by 11% to $0.05 per share, payable on November 30, 2018, to all shareholders of record as of November 16, 2018. Also, the Board authorized the repurchase of up to $200 million of Cognex stock in open market transactions.
Shares of Cognex, which plunged to a 52-week low ($39.00) during Monday’s regular trading session, closed at $39.61, down 3.95%. After the earnings announcement, the stock continued its poor performance by tanking another 10% in the extended hours of trading.
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