Why Coherent Shares Are Tumbling Today

Coherent Corp COHR shares are trading lower by around 20% after it reported Q4 FY23 results and provided below-consensus Q1 and FY24 outlook.

Revenue stood at $1.21 billion, above the high end of the guidance, beating the consensus of $1.15 billion.

At the end of the quarter, the backlog stood at about $2.7 billion.

The company's adj. EPS of $0.41, at the higher end of the guidance, surpassed the consensus of $0.38.

EPS benefitted from higher revenue, sequentially flat operating expenses, and a favorable tax rate. 

Adjusted gross profit rose to $432.8 million from $343.4 million a year ago, with margin contracting to 35.9% from 38.7% a year ago.

Adjusted operating income increased to $185.1 million from $168.6 million the prior year, with the adjusted margin decreasing to 15.4% from 19.0% a year ago.

Operating cash flow stood at $182 million at the end of the year. As of June 30, 2023, cash, cash equivalents, and restricted cash stood at $833 million.

Outlook: COHR expects Q1 revenue of around $1.0 billion – $1.1 billion (consensus $1.17 billion) and adjusted EPS of $0.05-$0.20 vs. estimate of $0.46.

The company expects FY24 revenue of $4.5 billion – $4.7 billion vs. $4.88 billion consensus and adjusted EPS of $1.00 - $1.50 vs. consensus of $2.46.

Price Action: COHR shares are down by 23.3% at $36.02 premarket on the last check Wednesday.