Coherent Corp. (NYSE:COHR) shares traded lower in premarket trading Thursday after the company reported third-quarter results following Wednesday's market close.

Coherent Q3 Results Beat Expectations

The company reported third-quarter revenue of $1.806 billion (up 20% year over year), topping the analyst consensus estimate of $1.780 billion.

Adjusted gross margin expanded 105 basis points year over year to 39.6% during the quarter.

Adjusted earnings came in at $1.41 per share, exceeding Wall Street estimates of $1.40 per share.

AI Data Center Demand Drives Growth Outlook

CEO Jim Anderson said demand tied to artificial intelligence data center infrastructure continues to accelerate, adding that the company is expanding manufacturing capacity to meet customer needs.

"As AI datacenter infrastructure continues to scale, we are rapidly expanding capacity to meet demand," Anderson said. "With the breadth of our photonic technology portfolio and our manufacturing scale, we believe Coherent is uniquely well positioned to capitalize on this multi-year growth opportunity."

Issues Fourth-Quarter Guidance

For the fourth quarter, Coherent expects adjusted earnings of $1.52 to $1.72 per share, compared with the analyst consensus estimate of $1.53 per share.

The company also forecast fourth-quarter revenue of $1.91 billion to $2.05 billion, compared with Wall Street expectations of $1.912 billion.

Coherent projected non-GAAP gross margin of 39% to 41% for the fourth quarter, while non-GAAP operating expenses are expected to range between $360 million and $380 million.

Coherent Stock Reaction

COHR Price Action: Coherent shares were down 3.14% at $333.85 during premarket trading on Thursday, according to Benzinga Pro data. The shares have surged about 395.07% over the past year.

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