Why Coherent Shares Are Rising Today

Coherent Corp. COHR shares are trading higher on Tuesday in the premarket session after delivering street-beating second-quarter results yesterday.

The company reported second-quarter sales of $1.131 billion, beating the Wall Street estimate of $1.120 billion. The company reported adjusted EPS of $0.36, beating the analyst consensus of $0.26.

Non-GAAP gross profit slumped 25.3% to $407.7 million. Non-GAAP gross margin contracted to 36% from 39.8%.

The primary drivers of the year-over-year decline were lower revenue, which resulted in lower fixed cost absorption, and unfavorable product mix.

Non-GAAP operating margin decreased to 15.2% from 20.3%.

The company said it enjoyed a third straight quarter of solid orders for AI/ML-related Datacom transceivers.

“In response to customer demand, we continue to make progress toward expected commercial launch of our 1.6T transceivers and components in the first quarter of fiscal 2025,” the company said.

Outlook: Coherent expects third-quarter revenue of $1.12 billion-$1.20 billion (estimate: $1.17 billion). The company forecasts adjusted earnings per share in the band of $0.32-$0.52 (estimate: $0.38).

Coherent revised fiscal year 2024 revenue outlook from $4.5 billion-$4.7 billion to $4.55 billion-$4.70 billion (estimate: $4.59 billion). The company boosted the adjusted earnings per share outlook from $1.00-$1.50 to $1.30-$1.70 (estimate: $1.28).

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Price Action: COHR shares are trading higher by 9.67% to $54.20 premarket on the last check Tuesday.