Why Coherent Stock Popped Today

Shares of Coherent (COHR 17.05%) are up 16.4% as of 12:15 a.m. ET Tuesday after the optical materials and semiconductor specialist announced better-than-expected quarterly results.

Improving demand drove Coherent’s better-than-feared quarter

For its fiscal second quarter ended Dec. 31, 2023, Coherent’s revenue declined 17.4% year over year to $1.13 billion, translating to adjusted (non-GAAP) earnings of $86.4 million, or $0.36 per share (down from $0.95 per share a year earlier). Analysts, on average, were only modeling earnings of $0.25 per share on revenue of $1.11 billion.

In its quarterly letter to shareholders, Coherent management wrote that near-term growth and visibility continue to be negatively impacted by macroeconomic uncertainty. At the same time, however, Coherent not only saw signs of improving demand during the quarter, but also anticipates continued sequential improvement through the end of the fiscal year.

What’s next for Coherent investors?

For the current fiscal third quarter ending March 31, 2024, Coherent expects revenue of $1.12 billion to $1.20 billion, with adjusted earnings per share of $0.32 to $0.52. The midpoints of those ranges were technically mixed, relative to expectations. Wall Street analysts were anticipating lower earnings of $0.38 per share on revenue near the upper end at $1.17 billion.

Finally, Coherent revised its full-fiscal-year outlook to call for revenue of $4.55 billion to $4.70 billion (an increase of $50 million from the low end of previous guidance), with adjusted earnings per share of $1.30 to $1.70 (up from $1.00 to $1.50 before).

Coherent still has work to do before it officially recaptures sustained, profitable growth. But it’s hardly surprising to see shares rallying, given this beat-and-raise performance.

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