Cognex results for 1st half 2012

Dr. Shillman says, “Our results …were fantastic;” Let’s look at what he’s so excited about.

Comparing Q2 ’12 with the same period in ’11, revenue was up 1% or $933,000. Doesn’t sound so exciting, does it? The half year comparo looks a little better: 3% growth or $4.2m.

But as all true capitalists will tell us, it’s income that matters, not revenue. (Translation for my British readers: profit is more important than sales.) So let’s look at the income performance.

For Q2, this grew 4% or $670,000, and for the half growth was 4% again or $1.3m. Respectable numbers, to be sure, and results that most companies would kill for, but fantastic?

Well, buried in the financial statement were a couple of highly relevant notes. First, Cognex took quite a hit on shifts in exchange rates, and as 2/3rds of their business is outside the US, that had quite a big impact. And second, the solar sector, that was growing so explosively a few years ago, has flatlined, so machine vision sales in that market have taken a dive.

In conclusion then, taking everything into consideration, these seem like pretty healthy results. Good job Cognex.

I’d still like to see them doing something interesting with that fat pile of cash they’re sitting on. Perhaps bumping up the R&D spend would be a good start. Or if they really have nothing else to do, how about increasing the dividend? If they did that I might buy some stock!