This column originally appeared on Real Money Pro at 2 p.m. EDT on April 23.
NEW YORK (Real Money) -- On Tuesday morning, laser optic manufacturing company II-VI (IIVI) reported its March quarter results. I recommended this company to Real Money Pro subscribers as a way to play the rebound in manufacturing and to benefit from the ongoing shift toward laser based manufacturing.
Although the company missed bottom-line expectations by 1 cent per share, the stock gapped down more nearly 14% in early market trading. Putting this into perspective, that 1 cent per share miss equates to a 4% earnings miss considering II-VI delivered earnings of 25 cents per share for the March quarter.
Rather than simply rely on the headlines and flash news reported by a number of services, I read through the company's earnings release this morning and found several positives, particularly when I viewed its results on a sequential basis. While year-over-year comparisons are what the financial media reports, the sequential comps indicate the direction of the business.Here's what I found:
- Overall bookings rose 10%, quarter over quarter. This bodes well for revenue growth in the coming quarters.
- Bookings at the company's high margin infrared optics rose an even stronger 15% vs. the December quarter. This is quite bullish for both margins and earnings growth in the coming quarters.
- II-VI completed three acquisitions in recent months, which were a drag on profits during the quarter. That is a short-term issue and the management team has a track record of integrating businesses and squeezing the costs out of them.
- During the quarter, the company completed the $25 million share repurchase program authorized in May 2012.
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