Saturday, May 4, 2013

Why Coherent Shares Ran Higher

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Coherent (NASDAQ: COHR  ) ran higher by as much as 16% after the company reported fiscal second-quarter earnings.

So what: Revenue in the quarter added up to $200.1 million, with adjusted earnings per share of $0.84. Both headline figures were ahead of consensus forecasts, which were perched at $198.2 million in sales and an adjusted profit of $0.80 per share. CEO John Ambroseo said demand in Coherent's commercial end markets improved, resulting in record bookings for materials processing.

Now what: The recent acquisition of Lumera Laser helped boost medical OEM application bookings to all-time highs, and the only segment to see weakness was the research market, in part because of sequestration in the United States. Revenue in the coming quarter is expected to be in the range of $200 million to $212 million, the midpoint of which is higher than the $204 million consensus. Needham & Co. has upgraded Coherent to "buy" with a $65 price target, citing improving demand.

Interested in more info on Coherent? Add it to your watchlist by clicking here.

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