II-VI Stock Falls After Q4 Results, Notes Gross Margin Pressure

II-VI Inc IIVI reported fourth-quarter FY21 revenue growth of 8.3% year-on-year to $808 million, beating the analyst consensus of $783.33 million.
Segments: Photonic Solutions revenue increased 6.3% Y/Y to $549.7 million. Revenue from Compound Semiconductors rose 12.8% Y/Y to $258.3 million.
Margins: The non-GAAP gross margin contracted 370 bps to 38.6% as the costs rose 12.7% Y/Y.
The non-GAAP operating margin expanded 170 bps to 18.4% as the expenses declined 18% Y/Y.
Non-GAAP operating margin for Compound Semiconductors expanded 810 bps to 23.7%, while contracted 130 bps to 15.9% for Photonic Solutions segment.
Non-GAAP EPS of $0.88 beat the analyst consensus of $0.76.
II-VI held $1.6 billion in cash and equivalents as of June 30, 2021, and generated $574.4 million in operating cash flow during FY21.
The Q4 revenue exceeded the top end of II-VI's guidance with a book-to-bill ratio of 1.14.
In communications, FY21 revenue improved 11%, driven by 100, 200, 400G datacom transceivers and coherent optics.
II-VI's life sciences revenue grew by 65% Y/Y in support of COVID and other diagnostic testing.
II-VI expects the pending acquisition of Coherent Inc COHR to close during the first calendar quarter of 2022.
Outlook: II-VI sees Q1 FY22 revenue of $780 million - $830 million compared to the analyst consensus of $804.04 million.
It forecasts a non-GAAP EPS of $0.75 - $0.90 versus the analyst consensus of $0.90.
Price action: IIVI shares traded lower by 5.30% at $64.26 on the last check Tuesday.

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II-VI Stock Falls After Q4 Results, Notes Gross Margin Pressure

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