II-VI (IIVI) Investors Likely to Look Through Dilution To Strong Bookings - Needham & Company

Needham & Company analyst, James Ricchiuti, believes investors will react positively to II-VI Incorporated's (NASDAQ: IIVI) print and have already discounted the dilutive effects of the acquisitions to focus on the robust bookings. No change to Buy rating, PT goes to $26 from $23

Revenues increased 12% y/o/y (and 10% organically) to $205.1M, above the company’s recently upward revised guidance of $190M-$198M and above consensus $192M (Needham $194M). GAAP EPS totaled $0.24, with non-GAAP EPS of $0.35 (excluding acquisition-related expense), compared with recently revised guidance of $0.26-$0.29. Results exceeded consensus and our $0.28 estimate.

Photonics (39% of FQ3 revenues) posted record revenue of $81M, up 25% y/o/y, reflecting strong demand in the optical communications market. Laser Solutions (36% of FQ3 revenues) posted flat revenues of $73.8M, which included $4M from the acquired businesses in the quarter (including two months of EpiWorks and 15 days of Anadigics). Performance Products (25% of revenues) increased 12% to $50.7M.

Total bookings increased ~20% to $235.5M (1.15 book-to-bill), with Photonics bookings up 43% y/o/y and the book-to-bill at 1.28:1 while Laser Solutions bookings were up 12% (book-to-bill of 1.11). Performance Products orders were flat, with book-to-bill at 1.0.

The $26 PT is based on 20x CY17 EPS.

For an analyst ratings summary and ratings history on II-VI, Inc. click here. For more ratings news on II-VI, Inc. click here.

Shares of II-VI, Inc. closed at $23.14 yesterday.

You May Also Be Interested In

• HSBC Upgrades UPS (UPS) to Buy, 'Back to earnings growth'
• Boeing (BA) PT Lowered to $224 at Citi
• Meta Platforms Inc. (META) PT Lowered to $500 at Wolfe Research, 'LT Thesis Remains In-Tact'