Photronics Beats Estimates But Has a Big Earnings Drop

Seth Jayson, The Motley Fool
Updated

Photronics (NAS: PLAB) reported earnings on May 14. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended April 29 (Q2), Photronics met expectations on revenue and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped and GAAP earnings per share increased.


Gross margin dropped, operating margin shrank, and net margin improved.

Revenue details
Photronics reported revenue of $117.5 million. The six analysts polled by S&P Capital IQ wanted to see revenue of $116.8 million on the same basis. GAAP reported sales were 12% lower than the prior-year quarter's $133.1 million.

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.14. The six earnings estimates compiled by S&P Capital IQ forecast $0.12 per share. GAAP EPS were $0.14 for Q2 compared to -$0.30 per share for the prior-year quarter.

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 25.4%, 200 basis points worse than the prior-year quarter. Operating margin was 11.3%, 460 basis points worse than the prior-year quarter. Net margin was 7.5%, 1,980 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $125.6 million. On the bottom line, the average EPS estimate is $0.16.

Next year's average estimate for revenue is $485.7 million. The average EPS estimate is $0.54.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 121 members out of 148 rating the stock outperform, and 27 members rating it underperform. Among 35 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 29 give Photronics a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Photronics is outperform, with an average price target of $9.17.

Over the decades, small-cap stocks like Photronics have provided market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement