SAN JOSE – Coherent, a global leader in materials, networking and lasers, reported a strong third quarter for fiscal 2024, beating analysts’ expectations with an earnings and revenue beat that sent the company’s stock up 6%. The company posted third-quarter earnings per share (EPS) of $0.53, beating the consensus estimate of $0.41. Revenue came in at $1.21 billion, topping analysts’ forecasts of $1.17 billion and marking a significant increase from the prior-year quarter.
The company’s revenue outperformance was attributed to strong demand for AI/ML-related Datacom transceivers, with 800G revenue increasing nearly 80% sequentially to nearly $200 million. Coherent’s results were also bolstered by a sequential increase of approximately 7% in revenue, demonstrating continued growth despite macroeconomic uncertainties that have impacted the pace of recovery in the telecom vertical.
Coherent's non-GAAP gross margin missed its own guidance slightly, coming in at 35.8%, down slightly from 36% in the previous quarter. The company cited new product ramps, a key facility outage, and higher inventory reserves as factors impacting the margin. However, its non-GAAP operating margin of 15.1% fell short of its guidance range of 14-16%.
Looking ahead, Coherent provided an optimistic fourth-quarter revenue guidance range of $4.62 billion to $4.70 billion, with the $4.66 billion median in line with the analyst consensus of $4.62 billion. This forecast reflects the company’s expectations for continued improvement in revenue growth.
Coherent’s CEO highlighted the company’s strategic initiatives, saying, “We are facing near-term challenges and we have made some bold moves that are characteristic of a sustainable market leader.” The company’s focus on customer intimacy, product leadership and operational excellence is expected to drive long-term shareholder value.
Investors responded positively to the earnings release and forward-looking statements, as reflected in the stock’s 6% gain. The company’s ability to beat guidance and a promising outlook for the upcoming quarter, especially in the growing AI/ML-related technology sector, contributed to the bullish investor sentiment.
Source: Investing
