COHR/CYMI story from DJ wires, 2:56 PM EST today
Coherent Dn 20% On Diminished 4Q Earnings Outlook
NEW YORK (Dow Jones)--Coherent Inc.'s (COHR) shares sank 20% after the
company announced that it would fall short of analysts' earnings expectations in
its fourth fiscal quarter.
The Santa Clara, Calif., laser manufacturer said earnings would be affected by the
strong dollar; the shift to solid-state technology from ion-laser technology in some
markets; increased research and development costs; and pricing pressures on its
skin-resurfacing lasers.
Coherent said it expects to report fourth fiscal quarter earnings of between 54 and
58 cents a share, compared with the First Call Inc. consensus projection of 79
cents. The company reported net income of 74 cents in the year-ago period.
Smith Barney Inc. analyst Mary Austin said that foreign currency accounted for
about 5 cents of the shortfall and R&D about 10 cents, with the other factors
responsible for the remainder.
The issues cited by the company will probably affect its financial results for the
next couple of quarters, Austin said. She added, however, that investors were
overreacting to the news, noting that the company should see increased sales in
1998 of its lasers for the hair-removal and deep ultra-violet, or DUV,
photolithography markets.
H.J. Meyers & Co. analyst Sean Chaitman said Coherent has been focusing
particular attention on the market for DUV photolithography, a process which is
used to make next-generation semiconductors.
The DUV photolithography market has been shifting to the use of smaller
transistors, which requires the use of more selective lasers, Chaitman said.
Coherent's 80%-owned subsidiary Lambda Physik is one of three makers of
lasers used in DUV photolithography, along with Cymer Inc. (CYMI) and Komatsu
Ltd. of Japan.
The three companies' 1995 sales in this market totaled $25 million, Chaitman
said. That figure is expected to grow to between $200 million and $300 million in
1998 and to $500 million or more in 2000, he said.
Chaitman said Coherent's R&D spending to develop lasers for DUV
photolithography and other markets - such as for photorefractive keretectomy to
correct nearsightedness - should benefit the company's bottom line in the second
half of 1998.
Coherent's shares were recently trading at 44, down 12 7/8, or 22.6%. |
