II-VI Incorporated beats earnings guidance by 22 percent in FQ3

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II-VI Incorporated beats earnings guidance by 22 percent in FQ3.
Image: II-VI Incorporated

II-VI Incorporated recently revealed it beat both its revenue and earnings per share (EPS) projections for the fiscal third quarter by 22 percent. The optoelectronic component maker attributed its pandemic-defying success to the “professionalism and dedication” of its global workforce.

Moreover, the Saxonburg, Pennsylvania-based corporation’s fiscal fourth-quarter outlook indicates it expects its growth to continue through the June period.

II-VI’s Strong FQ3 Grow

Last quarter, II-VI generated $627 million in revenue against adjusted net income of $44.1 million, or EPS of $0.44. In addition to exceeding its guidance, the firm beat its 2019 FQ3 sales by 83.1 percent and its net profits by 11 percent. The company also improved its operating cash flow by 5.33 percent year-over-year.

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II-VI’s robust fiscal third-quarter growth was driven by increased sales of its photonics solutions and compound semiconductors. The manufacturer’s optoelectronics revenue jumped by a whopping 150.7 percent while its multi-element product intake increased by 18.98 percent.

In a statement, CEO Dr. Vincent D. (Chuck) Mattera, Jr. noted his firm saw increased demand for its telecommunications and information technology components due to the ongoing 5G rollout. The executive highlighted II-VI’s transceiver and 3D sensor sales as being particularly robust last period. He also said his staff’s “extraordinary commitment” allowed the corporation to outpace its forecast despite the impact of COVID-19.

Continued Growth in FQ4

For the June quarter, II-VI offered a revenue range of $650 million to $700 million with adjusted EPS of $0.50 to $0.70. The firm’s projections represent a 79.2 to 92.9 percent sales improvement from FQ4 2019. However, the company cautioned that near-term visibility is limited as the coronavirus pandemic is disrupting product supply and demand.

Nevertheless, the component maker has an optimistic view of the fiscal fourth quarter because of its product mix and diverse clientele.

In its FQ3 earnings presentation, the firm noted its products have board applications in 5G backbone networks, base stations, and handsets. The company stated it sees market opportunities for its laser heads in automotive vehicle assembly. With major corporations such as Ford, Nokia, and ZTE as clients, the manufacturer has the connections to realize its positive forecast.

In addition, the company believes its best in class materials and components will resonate with buyers in the aerospace and defense sectors.

If II-VI expands its corporate business and lands new government contracts this period, it should end its fiscal year on a strong note.

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