Why Shares of Photronics Tumbled Today

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What happened

Shares of photomask manufacturer Photronics (NASDAQ: PLAB) slumped on Tuesday following the company's third-quarter results and news that the CFO was retiring. Photronics missed analyst estimates for both revenue and earnings, reporting a steeper-than-expected revenue decline; this comes three months after a weak second-quarter report. The stock was down about 20% at 3:30 p.m. EDT.

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So what

Photronics reported third-quarter revenue of $111.6 million, down 9% year over year and $3.5 million below the average analyst estimate. Sales of integrated-circuit (IC) photomasks slumped 7% to $85.1 million, while sales of flat-panel-display (FPD) photomasks dropped 16% to $26.5 million.

Earnings per share came in at $0.06, down from $0.12 during the prior-year period and $0.03 lower than analyst expectations. Photronics CEO Peter Kirlin commented on the quarter:

Sean Smith, CFO of Photronics since 2002, will step down from that position on Sept. 4. The new CFO will be John Jordan, currently the CFO of data-visualization company AstroNova.

Now what

Photronics sees the fourth quarter being similar to the third quarter, with growth in high-end memory offset by weakness in high-end logic. Revenue is expected to come in between $108 million and $116 million, up from $107 million during the prior-year period and roughly flat at the midpoint sequentially. EPS is expected to be between $0.03 and $0.09, compared to $0.07 in the fourth quarter of last year.

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Timothy Green has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.