Coherent reported reported solid fourth-quarter earnings results on Wednesday afternoon, but its share slid after its revenue outlook missed projections.

Adjusted earnings-per-share rose to $1.00 versus Wall Street's consensus estimate of 92 cents, according to Factset, and up from 61 cents last year. Revenue for the quarter reached $1.53 billion, ahead of expectations for $1.51 billion, and up 16% over last year, and up 23% for fiscal 2025.

But Coherent's revenue outlook for the first quarter came up short of projections, and the stock was down 16% in late trading following the release.

This is breaking news. Read a preview of Coherent's earnings below and check back for more analysis soon.

Optical networking company, Coherent, reports its fourth quarter on Wednesday afternoon, and analysts are expecting continued strength from its artificial-intelligence-fueled networking business coupled with a slowdown in the rest of the company.

On average, Wall Street analysts expect the company to report adjusted earnings-per-share of 92 cents, up from 61 cents in the fourth quarter of 2024. Sales are expected to be up 15% from last year to $1.5 billion.

The biggest 2025 driver in the stock market has been the investment in AI data centers, spiraling into hundreds of billions of dollars worldwide. Coherent benefits from the high-bandwidth optical networking that these data centers are now just beginning to require as they scale up to massive proportions.

Coherent stock is up 23% on the year compared to 12% for the Nasdaq 100 index. But it started out 2025 down 47%, bottoming in early April as the White House announced high worldwide tariffs, with Coherent shares down 20% in a single day.

What turned around its fortunes was that Coherent's networking business hasn't missed a beat. Last quarter's segment revenue was up 45% since the third quarter of 2024, and companywide profitability metrics were above analyst expectations. The Wall Street consensus projection is for 38% fourth-quarter networking sales growth, offset by the materials and laser segments, expected to see a combined revenue decline of 8%.

A future driver could be Cohrent's inclusion as a supplier for AI-leader Nvidia's new optical networking switches, announced in March. Optical networking provides advantages over traditional copper wiring, but each connection uses electricity, and that adds up quickly in giant data centers, which are already filled with power-hungry AI servers.

Nvidia sees a future for optical networking if the energy costs can be reduced, and its new switches are a first step in that direction being 3.5 times more energy efficient than the usual optical switch setup. Over time, this could become a larger portion of the hundreds of billions of dollars being spent on new data centers, and Coherent may get swept up in that.

But meanwhile, Coherent's optical networking business is doing just fine.