II-VI Shares Drop On Q2 Earnings Miss, Weaker Outlook; Provides Update On Coherent

II-VI Inc IIVI reported second-quarter FY22 revenue growth of 2.6% year-on-year to $806.8 million, missing the consensus of $816.97 million.
Segments: Photonic Solutions revenue increased 8.7% Y/Y to $525 million. Revenue from Compound Semiconductors declined 7.2% Y/Y to $281.8 million.
II-VI recorded bookings of $1.1 billion, up 21% Y/Y, and a backlog of $1.7 billion, up 58% Y/Y.
Margins: The non-GAAP gross margin contracted 170 bps to 40.3%. The non-GAAP operating margin contracted 230 bps to 19.7%.
Non-GAAP EPS of $0.92 beat the consensus of $0.86.
II-VI held $2.6 billion in cash and equivalents.
Outlook: II-VI sees Q3 revenue of $785 million - $825 million, below the consensus of $831 million.
II-VI sees non-GAAP EPS of $0.75 - $0.90 versus the consensus of $0.87.
Pending Acquisition: II-VI sees the Coherent Inc COHR acquisition closing by the middle of the second calendar quarter of 2022.
"II-VI delivered our first quarter of greater than $1.1 billion in bookings and a record backlog of $1.7 billion as demand continues across our end markets, due to continued strength in the megatrends underpinning our growth strategy. Products for the industrial and communications markets led our growth year-over-year," said Dr. Vincent D. Mattera Jr., Chair and CEO.
Price Action: IIVI shares traded lower by 3% at $62.96 in the premarket session on the last check Wednesday.

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