Thursday, May 2, 2013

A sleeping giant wakes?

Looking at the Q1 2013 results from Cognex, it seems to me they’re starting to respond to competition from rivals. Let’s take a quick look at the numbers, and then I’ll offer my take on what’s happening.

First, comparing this latest quarter with Q1 of ’12, revenue was up 4% to almost $81m and income grew 9% to $15.6m. So it’s fair to say things are going well, but what of the long term?

Here’s where I see a couple of interesting indicators. R&D spend is up 9% compared to a year ago, and SG&A (basically, the sales force,) is up 5%. Those increases are larger than the revenue growth, and, as stated on the published results, are “to accelerate the introduction of new products.”

What new products have we seen? Well there have been a couple of DataMan code readers, which appeal to markets outside of manufacturing, like logistics and “e-tail” and there’s also a 3D laser sensor, the DS1000 series.

While the sales volumes for this will be small it’s an interesting, and late, riposte to SICK’s Ranger series of products, and perhaps also the growing strength of LMI. What I haven’t registered though is any advance in the VisionPro software platform. And with ID readers accounting for a quarter of revenue and growing fast, I suspect we won’t.

What’s Brian’s take on this? Well let’s factor in one other point: Cognex are doing well in Asia, except for Japan where, adjusting for exchange rate shifts, revenue is flat. Who lives in Japan? Why isn’t that Keyence’s home?

So, I think that while Cognex have decided to address the threat from the 3D guys, it’s really Keyence that has them concerned. Keyence is bigger and has deep pockets, and that my friends, is why Cognex are plowing more resources in to product development.

I think we machine vision users will be the beneficiaries. Especially if we buy code readers.

No comments: