Electronics and e-commerce help Cognex grow 12% in 2020

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Cognex saw 12 per cent year-on-year growth in 2020, thanks to higher revenue from consumer electronics and e-commerce in the latter half of the year.

The company's revenue was $811m for the year. It saw 37 per cent higher revenue in the third quarter compared to the same period in 2019, and 32 per cent increase in the fourth quarter.

Cognex said that revenue growth came particularly from large consumer electronics and e-commerce customers that benefited from higher consumer demand during the pandemic. Revenue from medical-related industries also increased, though considerably less than the increase from consumer electronics and logistics.

Operating income on a GAAP basis was 21 per cent of revenue compared to 20 per cent for 2019 because of the higher revenue.

Cognex invested $131m, or 16 per cent of revenue, in engineering, marking the company’s tenth consecutive year of research, development and engineering growth.

The company recorded pre-tax restructuring charges of approximately $16m for steps taken to reduce expenses, including a workforce reduction and lease terminations. In addition, Cognex recorded non-cash charges of approximately $27m in the second quarter for the impairment of intangible assets and write-down of excess and obsolete inventory due to the deteriorated business conditions. Excluding restructuring and other charges, operating income was 27 per cent of revenue for 2020 compared to 20 per cent in the prior year.

'It’s hard to call 2020 a “good” year, but we are, nevertheless, pleased with the financial results that we were able to achieve,' said Dr Robert Shillman, founder and chairman of Cognex. 'We set a new record for both Q4 and annual revenue despite significant economic disruption and weakness in the automotive industry. Importantly, we remained focused on long-term growth opportunities, which we believe has positioned us well going into 2021.'

Cognex believes revenue in Q1-21 will be between $225m and $245m. The company expects growth over both Q1-20 and Q4-20 thanks primarily to higher revenue anticipated from the e-commerce sector of logistics.

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