SAN JOSE - Coherent , Inc. (NASDAQ: NYSE:COHR), a global leader in materials, networking, and lasers, reported a robust third quarter for fiscal year 2024, surpassing analyst expectations with an earnings and revenue beat that sent its shares up by 6%.
The company announced third-quarter earnings per share (EPS) of $0.53, exceeding the consensus estimate of $0.41. Revenue reached $1.21 billion, topping the analyst forecast of $1.17 billion and marking a significant increase from the previous quarter.
The company's revenue outperformance is attributed to strong demand for its AI/ML-related Datacom transceivers, with 800G revenue soaring nearly 80% sequentially to almost $200 million. Coherent's results were also bolstered by a sequential increase of approximately 7% in revenue, showcasing continued growth despite macroeconomic uncertainties that have affected the Telecom vertical's recovery pace.
Coherent's non-GAAP gross margin slightly missed its own guidance, coming in at 35.8%, a minor decrease from the previous quarter's 36%. The company cited new product ramps, a power failure at a key facility, and higher inventory provisions as factors impacting margins. Nonetheless, the non-GAAP operating margin of 15.1% fell within the projected range of 14-16%.
Looking ahead, Coherent provided an optimistic fourth-quarter revenue guidance range of $4.62 to $4.70 billion, with the midpoint of $4.66 billion aligning with the analyst consensus of $4.62 billion. This forecast reflects the company's expectation for ongoing sequential improvement in revenue growth.
Coherent's CEO highlighted the company's strategic initiatives, stating, "We are taking the short-term challenges head-on, 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 reacted positively to the earnings release and forward-looking statements, as reflected in the stock's 6% rise. The company's ability to beat guidance and its promising outlook for the upcoming quarter, particularly in the burgeoning field of AI/ML-related technologies, contributed to the upbeat investor sentiment.
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