Monday, November 14, 2011

Financial review

Today it’s the turn of Basler under the financial spotlight. Let’s see what we can deduce from their Q3 2011 results, published November 10th.

In the commentary there’s a lot of talk comparing the first three quarters of 2011 with the same period in ’10. That’s hardly surprising because those numbers look good: revenues, gross margin, earnings per share, cash flow all improved. But third quarter comparisons don’t look quite so attractive: Revenues down 16%, earnings per share down 13%. Cash flow however was very strong, up 81%.

So what’s behind these numbers? Allow me to make three observations:

  • Headcount is up somewhere around 10%. At the same time, R&D and administration costs have increased.
  • The Solutions business seems to be struggling. Costs have been cut to match the decline in revenues but I have to wonder how much longer Basler want to be in this business.
  • Surveillance cameras are a bright spot, sales having doubled from Q3 2010.

What does this mean for the machine vision industry as a whole?

Clearly, it’s hard to make money in solutions. Selling hardware seems more lucrative. Also, it’s a competitive, product-led industry, hence the need to pump more resources into R&D.

And is there an industry-wide downturn? Basler say there has been a “cyclical downturn.” I’m not convinced though. I don’t recall the Cognex numbers suggesting a dip. I didn’t get to Vision 2011 this year but I’m curious what the mood was. Any readers care to comment?

No comments: