Photronics PLAB reported second-quarter fiscal 2024 non-GAAP earnings of 46 cents per share, missing the Zacks Consensus Estimate by 16.36% and decreasing 14.8% year over year.
Revenues of $217 million inched down 5% year over year and up 0.3% sequentially. The year-over-year decline was caused by the impact of the Taiwan earthquake and the Chinese New Year holiday.
The earthquake also resulted in a sales decline of approximately $3 million due to production downtime and losses in inventory across the IC and FPD segments.
Quarter Details
Integrated Circuit revenues increased 2% sequentially but declined 4% year over year to $160.9 million.
Photronics, Inc. Price, Consensus and EPS Surprise
Photronics, Inc. price-consensus-eps-surprise-chart | Photronics, Inc. Quote
The upside was primarily driven by the higher demand in the IC mainstream sales due to market share gains. However, High-end IC sales declined, primarily due to lower demand in the United States, which affected overall IC revenues.
FPD revenues declined 10% year over year to $56.1 million. Sequentially, revenues fell 5%. Foreign exchange headwinds caused the downside in the FPD segment.
Second-quarter fiscal 2024 gross margin contracted 200 basis points (bps) year over year to 36.5%.
Research & development expenses, as a percentage of revenues, expanded 50 bps year over year to 2%. Sales and marketing expenses, as a percentage of revenues, increased 100 bps year over year to 8.8%.
Operating income was $56.1 million, down 16.4% year over year. Operating margin contracted 340 bps year over year to 25.8%.
Balance Sheet & Cash Flow
As of Apr 28, 2024, cash and cash equivalents and short-term investments were $559.9 million, compared with $521.5 million as of Jan 28, 2024.
For the second quarter, total debt was 21.8 million compared with $23.4 million in the previous quarter.
Cash generated from operating activities was $76.5 million and cash invested in organic growth through capital expenditures was $20 million.
Guidance
For third-quarter fiscal 2024, Photronics expects revenues between $221 million and $229 million.
Earnings are expected between 53 cents and 59 cents per share.
Zacks Rank & Stocks to Consider
Currently, Photronics has a Zacks Rank #3 (Hold).
Photronics’s shares have lost 16.1% year to date against the Zacks Computer & Technology sector’s increase of 6.7%.
Nutanix NTNX, CrowdStrike CRWD and Dell Technologies DELL are some better-ranked stocks that investors can consider in the broader sector.
Nutanix sports a Zacks Rank #1 (Strong Buy), while CrowdStrike and Dell Technologies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutanix’s shares have increased 50.6% year to date. NTNX is set to report third-quarter fiscal 2024 results on May 29.
CrowdStrike’s shares have surged 35.3% year to date. CRWD is scheduled to release first-quarter fiscal 2025 results on Jun 4.
Dell Technologies has surged 96% year to date. DELL is scheduled to release first-quarter fiscal 2025 results on May 30.
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