The stock of Coherent (COHR) is down 16% after the semiconductor company reported revenue guidance that disappointed Wall Street.
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The Pennsylvania-based company announced earnings per share (EPS) of $1, which topped the $0.92 expected among analysts. Revenue for the year’s second quarter totaled $1.53 billion, which was ahead of the $1.51 billion forecast on Wall Street. Sales were up 16% from a year earlier.
Unfortunately, Coherent’s revenue guidance overshadowed what was otherwise a strong print from the optical materials and semiconductor concern. For the current quarter, Coherent said that it expects revenue of $1.53 billion, which is basically the same as sales generated in Q2 of this year and is 0.6% below analysts’ consensus estimate.
Laser Business Sale
Coherent’s networking business unit saw its revenue rise 39% year-over-year in calendar Q2 to $945 million, above expectations for $940 million in sales. That strong showing was partially offset by the company’s other two business lines, materials and lasers, which were down a combined 8% in the quarter.
Just before Coherent’s latest earnings were released after markets closed, the company announced the sale of its laser business for defense markets at a price of $400 million. Money generated from the sale will be used to pay down the company’s $3.7 billion in debt.
Is COHR Stock a Buy?
The stock of Coherent has a consensus Strong Buy rating among 15 Wall Street analysts. That rating is based on 14 Buy and one Hold recommendations issued in the last three months. The average COHR price target of $105.31 implies about 8% downside risk from current levels. These ratings are likely to change after the company’s financial results.
