II-VI Incorporated Hits 52-Week High on Solid Q2 Results

Shares of II-VI Incorporated IIVI reached a new 52-week high of $18.30 during its trading session on Mar 16. This improved upon the last 52-week high of $18.00 hit on Mar 12.

II-VI Incorporated closed the session at $18.05, yielding a solid year-to-date return of 32.2%. The trading volume for the session was 0.3 million shares. Earnings estimate revisions for fiscal 2015 and 2016, along with an expected earnings growth rate of 20% for the next 5 years, indicate further upward potential for this machinery company.

Growth Drivers

II-VI Incorporated holds a sound earnings track record, with better-than-expected performance in the trailing four quarters. Average earnings surprise is a positive 31.58%. In second-quarter fiscal 2015 (ended Dec 31, 2014), the company’s earnings came in at 24 cents per share, 50% above the Zacks Consensus Estimate of 16 cents.

Also, revenues increased 3% year over year on the back of a strong product line. Bookings were up 11.3% in the quarter. Total costs and expenses decreased 6.3% over the year-ago tally. Gross margin improved 460 basis points (bps) to 35.7%, while operating margin increased 370 bps to 9.3%.

For 2015, the company expects revenues within $174−$182 million and adjusted earnings in the range of 18−24 cents per share.

Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for II-VI Incorporated rose 22.2% to 88 cents per share for fiscal 2015 and 7.3% to $1.03 for fiscal 2016. These estimates represent year-over-year growth of 4.2% for fiscal 2015 and 18.3% for fiscal 2016.

With a market capitalization of $1.1 billion, II-VI Incorporated currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the machinery industry include CUI Global, Inc. CUI, ESCO Technologies Inc. ESE and AO Smith Corp. AOS. All these stocks hold the same Zacks Rank as II-VI Incorporated.

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