28 Jan 2011
Microelectronics orders up a staggering 94.5% on Q1 2010 help laser giant Coherent achieve a quarterly bookings record of $234.4 million in Q1 2011.
The overwhelmingly positive vibes from Photonics West had obviously rubbed off on exuberant Coherent executives John Ambroseo and Helene Simonet as they presented details of yet another quarter of record-breaking financial performance. Highlights from the company’s first fiscal quarter ended January 1, 2011, included an all-time quarterly bookings record of $234.4 million as well as record quarterly revenues of $84.4million and $38.1 million in Coherent’s microelectronics and scientific segments respectively.
“In addition to the record performance on the income statement, we have done an outstanding job managing working capital and ended the first quarter with approximately $297 million in cash and cash investments,” Ambroseo, Coherent’s CEO, told investors. “We plan to deploy some of this cash on targeted acquisitions and have also received approval from our Board to repurchase up to $75 million in common stock over the next twelve months.”
Coherent’s overall net sales and net income for the quarter were $183.1 million and $19.1 million respectively. This compares with net sales of $122.8 million and a net income of $4.2 million for the first quarter of fiscal 2010 and $166.4million and $9.9million in Q4 of fiscal 2010. Simonet, Coherent’s chief financial officer, predicted that second quarter revenues will now range from $187 million to $192 million, the equivalent of a sequential 2% to 5% increase.
“Positive news continues to flow in the second fiscal quarter of 2011,” added Ambroseo. “We have just received another substantial order for $32 million for lasers used in OLED and LCD manufacturing. These systems are scheduled for delivery through the end of the calendar year. The combined impact of record orders and record backlog results in a revenue outlook for fiscal 2011 of $760-$780 million.”
Microelectronics orders for the quarter came in at $129.5 million, up 63% sequentially and a staggering 94.5% versus the prior year period. Substantially higher revenue in the flat panel display (FPD) market was said to be by far the largest contributor to this growth. Other factors included the growing use of lasers in the advanced packaging market as well as record orders from semiconductor equipment OEMs.
Commenting on the FPD market, Ambroseo told investors that the indications were good that additional, sizable orders may be placed during this fiscal year. “The lasers for our recent $32million order will be used to produce larger format LTPS LCD displays and are going to different panel manufacturers than Q4’s $37 million order,” he revealed.
In terms of packaging, Coherent is in the right place at the right time to take advantage of the rapidly expanding via drilling market. The growth here is being fuelled by increased utilization of high density interconnect (HDI) PCBs. As an example, Ambroseo told investors that approximately 75 million smartphones sold in 2010 relied on HDI PCBs, and that that number was expected to double in 2011. This market opportunity has attracted several new equipment manufacturers, who incorporate Coherent’s E-Series carbon dioxide lasers into their products.
Bolstering the scientific offering
Quarterly orders of $43.3million in the scientific market were up 11.1% compared with the prior year period and said to be “unseasonably strong”. “The Chameleon product family and ultrafast amplifier systems remain the mainstays of our scientific business,” confirmed Ambroseo. “Chameleon orders were very strong and we established a new bookings record for amplifier systems.”
Of the many new products on show at Photonics West this week, delegates stopping at the Coherent booth got their first look at the new Chameleon Vision-S which offers shorter pulsewidths for high resolution imaging in the biomedical field.
Materials Processing and Instrumentation
Coherent’s remaining sectors are Materials Processing and Instrumentation and OEM components. There was cautious optimism as orders in the materials processing segment came in at $25.3 million, an increase of 16.3% sequentially and 47.8% versus the prior year period. “Included in the Q1 total are record orders for laser-based manufacturing tools,” said Ambroseo. “Sales of the E-1000 carbon dioxide laser are making inroads, with approximately two out of three orders replacing a competitive laser in the field. We believe these are positive signs that the material processing market continues on the road to recovery.”
In terms of Instrumentation and OEM Components, orders of $36.3 million were down 23.8% compared with the record-setting performance in the prior quarter and up 1.7% versus the prior year period. While this headline figure was impacted by tightening in spending by the US Department of Defense, there was hope that rising demand for certain products in Asia would offer some compensation.
• Coherent's stock was up more than 16% in early trading following the latest results announcement, reflecting a surge of investor confidence and driving the firm's market capitalization to some $1.4 billion.
About the Author
Jacqueline Hewett is a freelance science and technology journalist based in Bristol, UK.