Coherent Corp (NYSE:COHR), a global leader in photonics, stock plunges 22.96% (As on August 14, 11:21:07 AM UTC-4, Source: Google Finance) after the company  reached a definitive agreement to sell its Aerospace and Defense business to private equity firm Advent for $400 million, as part of the company’s strategic portfolio optimization. The transaction, expected to close in the third quarter of 2025, will allow Coherent to focus on its core growth markets while using proceeds to reduce debt, which the company said would be immediately accretive to earnings per share. The transaction remains subject to customary closing conditions. The company saw continued growth in the ramp of our new products including our 100g, 400G and 800g ZR ZR plus coherent transceivers and expect these products to increase their revenue contribution throughout fiscal 26 and beyond. In particular, the 100G ZR product family is ramping rapidly driven by strong customer traction.

Moreover, during the fourth quarter of FY25, the company has commenced revenue shipments of the 1.6T transceiver products, enabling high-performance AI datacenter applications. The company has achieved initial revenue for our differentiated liquid-crystal OCS platform, which we estimate will expand our addressable data center market opportunity by over $2 billion by 2030. The company has introduced a new diamond silicon carbide composite material with enhanced thermal conductivity for cooling xPUs in AI datacenters. The company has launched a new excimer laser platform optimized for high-temperature superconductor tape production for emerging energy technologies including fusion.

COHR in the fourth quarter of FY25 has reported the adjusted earnings per share of $1, beating the analysts’ estimates for the adjusted earnings per share of 93 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 16 percent to $1.53 billion in the fourth quarter of FY25, beating the analysts’ estimates for revenue by 1%. This is driven by growth in AI data center demand coupled with the continuing recovery in telecom.

Looking forward, revenue for the first quarter of fiscal 2026 is expected to be between $1.46 billion and $1.60 billion. Gross margin for the first quarter of fiscal 2026 is expected to be between 37.5% and 39.5% on a non-GAAP basis. Total operating expenses for the first quarter of fiscal 2026 are expected to be between $290 million and $310 million on a non-GAAP basis. EPS for the first quarter of fiscal 2026 is expected to be between $0.93 and $1.13 on a non-GAAP basis.