The dictionary defines "muddled" as a confused condition and an oft-used synonym is "perplexing." Either are apt when describing the first half of 2016 in the industrial laser market.
The financials for key industrial laser and system manufacturers are now in—reflecting on their management's comments, considering economic news from the international manufacturing sector, and sorting out socioeconomic problems in global hot spots (i.e., Europe/Britain, Turkey, China) and the impact of presidential campaigns in the US give cause to turn in one's cloudy crystal ball for a tune-up.
On the bright side are financial reports from industrial laser leaders IPG Photonics (up 8% for the second quarter and 6% for first 6 months), Coherent (up 9% for the quarter and 3% for 9 months), TRUMPF (up 3% over last fiscal year), and MKS Instruments, including Newport (up 9% over last quarter). Rofin, however, went negative (down 5% for the quarter and down 8% for three quarters).
For what it's worth, the basket of 25 public companies I track—a global mix of laser, laser system, and related product suppliers, including the above—shows 59% increasing revenues in their latest reporting period, 31% experiencing decreasing revenues, and 10% remaining the same. A mixed bag that only sends out a positive signal when you measure each company's laser-related revenues, which are loaded heavily by the above major suppliers.
On the socioeconomic side of the coin, the news is equally perplexing—as sampled in the headlines below:
- Americans gloomy about economy, but Chinese are optimistic;
- Survey shows Chinese manufacturing weak in July;
- No China crisis yet;
- China labor costs only 4 percent below U.S.;
- U.S. manufacturing technology orders up for June but subdued vs. 2015;
- How to revitalize U.S.;
- America's economy is the 'least ugly';
- Europe first-half new car sales highest since 2008;
- Volkswagen to take $18.2B hit from emissions scandal;
- European machine tool orders record a 6.9% decrease in second quarter; and
- The business case for Brexit.
Not to mention the U.S. presidential campaign, which brings to mind the economist four-year mantras of "After all, it's a Presidential election year!" and "Major stock market declines occur during the first or second years of the four-year U.S. presidential cycle."
Now you can see why I used the "muddle" word as I struggle to make sense of the second half of 2016.