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Shares of semiconductor photomask manufacturer Photronics (NASDAQ: PLAB) slumped on Wednesday after the company reported fiscal second-quarter results. Photronics missed analyst estimates across the board, posting a larger-than-expected revenue decline. The stock was down about 9.1% as of 1:11 p.m. EDT.
Photronics reported second-quarter revenue of $108.3 million, down 12% year over year and nearly $3 million below the average analyst estimate. Integrated circuit photomasks generated $82.6 million of revenue, down 9% year over year, while flat-panel display photomasks produced $25.7 million of revenue, down 20% year over year.
Image source: Photronics.
Net income came in at $0.03 per share, down from $0.16 per share during the prior-year period and $0.02 shy of analyst expectations. Photronics CEO Peter Kirlin explained the earnings shortfall while emphasizing the progress the company made during the quarter:
Kirlin is "cautiously optimistic" that Photronics will achieve sales growth and margin expansion in the third quarter. He pointed to rapidly strengthening demand in the flat-panel display segment as a reason for optimism, as well as the fact that the company's facilities are running at full capacity. Photronics guided for between $110 million and $120 million of revenue for the third quarter, and EPS between $0.05 and $0.12.
Photronics operates in a cyclical industry, so ups and downs are to be expected. A solid third quarter could erase Wednesday's losses, but for now investors are punishing the stock.
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