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Cognex Management Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: CGNX

Let's now turn to the details of the quarter. Revenue from the factory automation market was $61.7 million and accounted for 73% of our total business. Reported factory automation revenue was flat year-on-year, as growth was offset by a substantial decline in revenue from solar manufacturers and unfavorable currency exchange rates. Backing these 2 items out, factory automation grew 9% over the prior year's second quarter. On a sequential basis, factory automation revenue increased by 4%. A nice increase, the order rate was lower than expected during the quarter, especially in Europe.

Looking at factory automation from a geographic perspective, Asia continues to be our best performer in terms of percentage growth. Factory automation revenue from Asia grew 7% year-on-year and 18% over the prior quarter. While the consumer electronic slowdown hampered growth year-on-year, spending in that market picked up during the second quarter, particularly in Greater China.

In Europe, factory automation declined 1% year-on-year and increased 3% over the prior quarter. On a constant currency basis, European factory automation grew 8% year-on-year. Strong performance in automotive, consumer products and food and beverage offset lower revenue from solar.

Factory automation revenue from the Americas increased 3% year-on-year and declined 1% from the prior quarter. We experienced slower spending in the second quarter, and project took longer to close. Sales to the Japanese factory automation market decreased 13% year-on-year and were flat with the prior quarter. Similar to Asia, the consumer electronics slowdown negatively impacted revenue year-on-year. Furthermore, we are not seeing the growth we expected in Japan following last year's tsunami, largely as a result of many customers shifting production to their facilities in Korea or Taiwan and China.

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