Investors in laser optics component maker II-VI
As the company indicated earlier in the month, the fiscal second quarter was a challenging one. Although sales were up 25% as reported, more than half of that growth came from the full inclusion of the acquired Marlow business in this quarter. In the major businesses, infrared optics revenue was up 14%, while near-infrared and military optics were down 12% and up 18%, respectively.
It was also a tough quarter from the perspective of operations. Gross margin came under pressure from slower revenue growth, high scrap costs, and cost pressures from inputs like energy and selenium. All considered, then, product gross margins fell five-and-a-half full points, and the operating income for the quarter was essentially flat with last year.
There was some good news, though. Bookings were up 27%, and the backlog did increase on a sequential basis. Interestingly, while the infrared business accounted for more than half of the sales this quarter, the backlog is fairly evenly divided between all four of the company's businesses.
Based solely on II-VI's report, I wouldn't read too much into the likely future reports for laser companies like Rofin-Sinar
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares). Rofin-Sinar is a Motley Fool Hidden Gems recommendation. The Fool has a disclosure policy.