Cohu Inc (NASDAQ:COHU) Tops Q3 Earnings Estimates, Stock Rises

Cohu Inc (NASDAQ:COHU) has reported its financial results for the third quarter of fiscal year 2025, delivering a performance that notably surpassed analyst expectations on profitability, though revenue fell slightly short of consensus estimates. The semiconductor equipment supplier's results and subsequent market reaction present a nuanced picture for investors.

Earnings and Revenue Performance Versus Estimates

The company's third-quarter performance presented a mixed but generally positive picture when measured against Wall Street forecasts. The key metrics highlight a significant achievement in controlling losses amidst a challenging market environment.

• Non-GAAP Earnings Per Share (EPS): Cohu reported a loss of $0.06 per share. This figure substantially outperformed the analyst consensus estimate, which anticipated a deeper loss of $0.203 per share.
• Revenue: Net sales for the quarter were $126.2 million. This came in just below the analyst estimate of approximately $127.5 million.
• GAAP Results: On a GAAP basis, the company reported a net loss of $4.1 million, or $0.09 per share, on the $126.2 million in revenue.

Market Reaction and Price Action

The market's initial response to the earnings release has been decisively positive. Following the announcement, Cohu's stock experienced a significant uptick in after-market trading, indicating investor approval of the company's ability to beat bottom-line expectations by a wide margin.

This positive sentiment is further reflected in the stock's recent performance trends, suggesting building momentum leading into the earnings report. Over the past month, the stock had already appreciated by over 15%, with more modest gains in the two-week and one-week periods preceding the release.

Management Commentary and Strategic Highlights

In the press release, Cohu President and CEO Luis Müller struck an optimistic tone, characterizing the quarter as "robust" and pointing to specific areas of strength. He highlighted ongoing growth in recurring revenue and achievements in advanced semiconductor test and inspection. Müller emphasized the company's dedication to innovation and operational excellence, expressing confidence in the long-term outlook.

A key strategic note was the mention of a recent convertible debt offering. The company intends to deploy the proceeds from this offering to support strategic initiatives and accelerate its innovation roadmap, signaling a focus on future growth investments.

Financial Position and Forward Guidance

Cohu maintained a solid liquidity position, reporting total cash and investments of $198.2 million at the end of the quarter. The company did not repurchase any shares during the period.

Crucially, management provided guidance for the fourth quarter of 2025, projecting sales in the range of $122 million, plus or minus $7 million. This outlook is notably in line with the analyst consensus estimate of $121 million for Q4 sales, providing a stable and predictable near-term forecast. The company did not provide a specific EPS outlook for the next quarter, for which analysts are currently estimating a profit of $0.08 per share.

Conclusion

Cohu's third-quarter results demonstrate a company successfully navigating a difficult period for the semiconductor equipment sector. While top-line revenue slightly missed the mark, the significant outperformance on profitability, a strong balance sheet, and in-line guidance for the next quarter have been received positively by the market. The substantial after-hours stock price increase reflects investor relief and optimism that Cohu's cost management and strategic positioning are yielding tangible results.

For a more detailed breakdown of Cohu's historical earnings and future analyst estimates, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. The performance data and analyst estimates are based on publicly available information and are subject to change. Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions.