The laser industry has benefited dramatically from waves of customers looking to make their operations more efficient, and II-VI (NASDAQ:IIVI) has been one of the biggest winners from that positive industry trend. By making a wide range of laser products, II-VI aims to serve customers in as many different markets as it can.

Coming into Tuesday's fiscal third-quarter report, II-VI investors expected that the laser maker would be able to generate strong growth in both revenue and earnings. II-VI's results were even better than most had projected, and good news about the company's immediate future also helped lift shareholders' spirits as II-VI aims to take full advantage of the opportunities ahead of it.

Yellow robotic arm holding laser and metal car door frame.

Image source: II-VI.

II-VI shoots and scores

II-VI's fiscal third-quarter results set some new records for the company. Revenue was up 20% to $295 million, eclipsing II-VI's old mark on the top line and coming in much faster than the 13% growth rate that most had expected. Adjusted net income of $23.6 million was 5% higher than in the year-ago period, and the resulting adjusted earnings of $0.36 per share were in line with the consensus forecast among those following the stock.

The most impressive aspect of II-VI's success came from its book-to-bill ratio. The company posted a figure of 1.13, signaling strong demand for products that exceeded what it's delivered recently. That figure continued to accelerate from the fiscal second quarter, and that could mark a growing trend that will take root even more fully in future quarters.

II-VI's segments gave some color on where the company is generating its best results. In the performance products segment, sales were higher by 30%, with an impressive 1.28 book-to-bill ratio. Operating income for the segment soared more than 70% from the year-ago quarter. The laser solutions business also did well, posting gains of 30% and 20%, respectively, in revenue and operating income. Even the photonics segment, which was a laggard last quarter, did well, getting its book-to-bill number back above 1 and seeing mid- to high-single digit growth in its top and bottom lines.

CEO Chuck Mattera expressed his satisfaction with how things are going for II-VI. "Our third quarter was marked by strong bookings, revenue, and earnings from our core markets of industrial, communications, and military," Mattera said, "with solid contributions from our newer growth markets." The CEO pointed to record performance for areas like carbon-dioxide laser optics and extreme ultraviolet lithography components, while silicon carbide substrates and optical communications products were also vital in producing growth for II-VI.

What II-VI sees next

II-VI has a lot of things to look forward to. Mattera noted that in the area of 3D sensing, "we are excited about our positioning, and we will continue to see our market opportunities growing." Moreover, the strong book-to-bill number gives II-VI a lot of confidence that orders will keep picking up.

The outlook for the fiscal fourth quarter was also solid. Revenue of between $295 million and $305 million would match up well with the roughly $300 million in sales that most investors expect. A predicted range of earnings of $0.37 to $0.43 per share is less than the $0.52 per share that those following the stock hope to see for the June quarter, but it wouldn't be the first time that II-VI has aimed low only to deliver better performance in the end.

Shareholders were happy with the report overall, and the stock jumped 7% in morning trading following the announcement. With so much demand for laser products from the industrial community, II-VI finds itself in the right place at the right time and should do everything it can to keep taking advantage of demand as long as it lasts.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends II-VI. The Motley Fool has a disclosure policy.