II-VI Inc announces ‘record’ Q3 2017 earnings

03 May 2017

Reports highest quarter bookings and revenues; sees strength in all market segments.

Diversified laser and optical components developer II-VI Inc. has this week presented its fiscal 2017 Q3 trading results, reporting “record bookings and revenue”, and adding that it sees “strength in all its market segments”.

The company’s headline figures reveal that forward bookings and quarter revenues both increased 19%, year over year; earnings per share (EPS) increased over 46% year over year; and, looking ahead, II-VI said there is “solid order coverage for its fourth quarter of 2017 across all three market segments: laser solutions, photonics products and Performance Products".

Dr. Vincent Mattera, Jr., the company’s President and CEO, commented, “Against an industry-wide backdrop of concern about a slow-down in the optical communications market, our third fiscal quarter unfolded largely as expected, and was in line with the high-end range of our guidance. We maintained a great sense of urgency in the service of our customers, and delivered 18% organic sales growth (19% total growth) and 200 basis point improvement in gross margin."

Bumper quarter: II-VI has just reported record revenues and bookings across all its market segments.

‘Diversified portfolio’

Dr. Mattera continued, “Each of our businesses contributed, including those serving the communications market, in which we recorded all-time high revenues and backlog during the quarter. I believe that our diversified product and technology portfolio along with the capital allocation strategy we have employed over the past several years drove our solid performance.”

Mattera believes that the company can sustain its overall performance during the fourth fiscal quarter given its strong backlog and record order coverage across all market segments.

The company said that its revenue success reflects the benefits of its investments in R&D. Its single largest investment in research and development was in II-VI Laser Solutions. This concentrated investment is designed to capture a “meaningful market share in end markets, with expected growth in the billions of dollars over the next several years,” the company stated.

R&D investments in this segment alone totaled $8.5 million and $25.7 million, for the three and nine months ended March 31, 2017, respectively. These investments impacted diluted earnings per share by $0.10 and $0.30, for the three and nine months ended March 31, 2017, respectively.

Outlook

The II-VI outlook for the fourth fiscal quarter, ending June 30, 2017 is to achieve revenue of $245m to $252m and diluted earnings per share of $0.33 to $0.37. EPS guidance for the fourth quarter includes an increase of about $0.05 diluted earnings per share for additional depreciation expense related to our increase in capital expenditures.