The results for 2012 were published February 11th, and they were …. okay. Even the usually effusive Doctor Bob had to restrict himself to “Our financial results for 2012 were quite good,” which is faint praise indeed.
And the reason for this lukewarm-ness?
Well although revenues set a new record, ($324m vs. $322m,) income, (profit, for my British readers,) dropped almost $2m, or nearly 3%. And the name-of-the-game is of course, profit.
But how can this be when sales are up, I (almost) hear you asking?
Well, the fourth quarter was weak, and as Cognex have a high level of fixed costs, that had a large impact on profit. More interestingly though, expenditure on Research, Development, and Engineering, (RDE) has been growing, up 9% since the third quarter alone.
The full year increase was only around $600k, or maybe three good image processing experts, but I see it as A Good Thing. New products are the life-blood of any business, but especially for one like Cognex, so firmly in the advanced technology field. Perhaps this means there'll be more than new code readers coming out in 2013.
The other reason for the reduced profit was increased spend under the SG&A heading. This is where the salesforce are lumped, so we can presumably conclude that there will be more Cognex sales people banging on our doors, and more of those unsolicited phone calls that really piss me off.
Stockholders will no doubt be delighted by the prepayment of dividends for the next two years. I can't wait to see what effect that ha son the stock price when the market opens Wednesday.
Cognex don't like to provide much a forecast of the year ahead, which might be wise but is also rather boring. My take though is this; I see them as investing cautiously and preparing for steady growth, which is pretty much how I see the market this year.