Coherent Expects $25M Revenue Hit From Coronavirus This Quarter, Says CFO

Coherent, which supplies laser-cutting equipment and services to the display industry, assumes it will take a $25 million revenue hit from the coronavirus outbreak in fiscal Q2 ending in March, said Chief Financial Officer Kevin Palatnik on a fiscal Q1 call Wednesday. “The Chinese government's actions, particularly from quarantining individuals in and around major hubs such as Wuhan and restricting the opening of businesses, will likely have an impact on our ability to sell our products and service our installed base in impacted areas.” Until workers return to their jobs from the government-extended Lunar New Year holiday, “we won't be able to fully assess what the quarter is going to look like,” said CEO John Ambroseo. Coherent’s laser-cutting service orders increased by about $3 million sequentially from fiscal Q4, reflecting higher demand for OLED smartphone displays in the holiday quarter, said Ambroseo. There was also a “small contribution” from foldable smartphone displays as the industry prepared for “the 2020 ramp,” he said. But the penetration rate for foldable smartphones “is likely to remain low for two to three years as manufacturers and suppliers lock down the specs and material sets,” he said.