“Optical Giant” Coherent Beats Earnings but Misses Guidance, Shares Plunge 19% After Hours

TradingKey - After U.S. markets closed on Wednesday, optical components leader Coherent (COHR) saw its stock plunge 19% in extended trading. Despite delivering a fourth-quarter earnings beat, the company’s weaker-than-expected guidance for the current quarter raised concerns about the sustainability of its growth. Coherent forecasted revenue of $1.46–1.6 billion for the current quarter, falling short of the analyst consensus.

For the fourth fiscal quarter ended June 30, Coherent reported revenue of $1.53 billion, a 16% year-over-year increase and a new all-time high. Adjusted EPS of $1.00 exceeded the expected $0.92. Driven by strong demand from AI data center investments, the company’s networking business surged 39% YoY to $945 million, slightly above the $940 million forecast — serving as the primary growth engine.

During the earnings call, management highlighted that demand for interconnect solutions between data center buildings is “very strong.” The company expects its data center and communications businesses to deliver sequential growth again this quarter.

Ahead of the earnings release, Coherent announced the sale of its defense laser business for $400 million, with proceeds allocated to pay down part of its $3.7 billion debt.

Investors are also closely watching Coherent’s potential role in Nvidia’s AI ecosystem. In March, Nvidia unveiled a new optical networking switch that is 3.5 times more energy-efficient than traditional systems. If widely adopted, it could dramatically reduce power costs in AI data centers. Analysts believe that if Coherent becomes a key supplier, it could capture significant value from what may become a multi-hundred-billion-dollar wave of data center investment.