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What: Shares of optical and electronic instruments maker II-VI
So what: II-VI's stock has slumped over the past three months on concerns over slowing revenue growth and shrinking margins, and today's warning reinforces those fears. The company's metals and chemicals unit was hit particularly hard on weak tellurium demand, suggesting that II-VI is much more exposed to the troubled global economy than investors had thought.
Now what: For the year ending June 2013, management now sees EPS of $1.14 to $1.21 on revenue of $582 million to $588 million, versus Wall Street's view of $1.34 per share and $593 million. "Our forecast for growth starts with an expected record backlog at June 30, 2012," CEO Francis Kramer reassured investors. "We also expect results to increase sequentially quarter by quarter as the year progresses." More important, with the stock now off 40% from its 52-week high and trading at a forward P/E of about 14, buying into that optimism won't come at an expensive price.
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