What happened
Coherent(NYSE: COHR) stock is plummeting in Wednesday's trading. The laser technologies specialist's share price was down 34% as of 11 a.m. ET, according to data from S&P Global Market Intelligence.
Coherent published results for the fourth quarter of its fiscal year, which ended June 30, before the market opened this morning. While the company's Q4 performance actually came in ahead of Wall Street's expectations, its forward guidance was far worse than anticipated.
So what
Coherent recorded non-GAAP (adjusted) earnings per share of $0.41 in on sales of $1.21 billion in the fourth quarter. Meanwhile, the average analyst estimate had expected per-share earnings of $0.38 on sales of $1.15 billion.
Coherent's revenue was up roughly 36% year over year in the period. While the company's earnings did beat Wall Street's target, adjusted net income declined 29% year over year. Still, the sales and earnings beats would have likely spurred bullish momentum for the stock if it weren't paired with disappointing forward guidance.
Now what
For the first quarter, Coherent expects to post sales between $1 billion and $1.1 billion. This guidance range fell short of the average analyst estimates target for $1.17 billion. Coherent expects to record adjusted earnings per share between $0.05 and $0.20 per share in the period -- far short of the average Wall Street analyst's target for adjusted earnings of $0.45 per share.
For the full-year period, management is targeting adjusted earnings per share between $1 and $1.50 on revenue between $4.5 billion and $4.7 billion. Again, this fell far short of the previous average analyst estimate's call for per-share earnings of $2.95 on sales of $5.1 billion. For comparison, the company recorded sales of $5.16 billion and adjusted earnings of $3 per share in its recently completed fiscal year.
Coherent says that it's continuing to face macroeconomic pressures, and the company's guidance and commentary suggests it's seeing headwinds when it comes to customer sales cycles. The company noted that customary inventory adjustments were a challenge, but that it believed that these issues would be transitory.
The company also noted that it has big opportunities related to the rise of artificial intelligence and machine learning. While Coherent's laser technologies could see increased demand stemming from semiconductor production and other categories related to these exciting new tech trends, it looks like sales and earnings will be taking a step back in the near term.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Coherent. The Motley Fool has a disclosure policy.
