Photronics (PLAB) Q2 Earnings Miss Estimates, Revenues Fall Y/Y

Core Viewpoint - Photronics reported a decline in earnings and revenues for the second quarter of fiscal 2024, primarily impacted by external factors such as the Taiwan earthquake and the Chinese New Year holiday [1][2]. Financial Performance - Non-GAAP earnings were 46 cents per share, missing the Zacks Consensus Estimate by 16.36% and decreasing 14.8% year over year [1]. - Revenues totaled $217 million, down 5% year over year but up 0.3% sequentially [1]. - Integrated Circuit (IC) revenues increased 2% sequentially but declined 4% year over year to $160.9 million, driven by higher demand in mainstream IC sales [3]. - FPD revenues fell 10% year over year to $56.1 million, with a sequential decline of 5% due to foreign exchange headwinds [3]. - Gross margin contracted 200 basis points year over year to 36.5% [4]. - Operating income was $56.1 million, down 16.4% year over year, with an operating margin contraction of 340 basis points to 25.8% [4]. Balance Sheet & Cash Flow - As of April 28, 2024, cash and cash equivalents and short-term investments were $559.9 million, an increase from $521.5 million as of January 28, 2024 [5]. - Total debt decreased to $21.8 million from $23.4 million in the previous quarter [6]. - Cash generated from operating activities was $76.5 million, with $20 million invested in organic growth through capital expenditures [6]. Guidance - For the third quarter of fiscal 2024, Photronics expects revenues between $221 million and $229 million, with earnings projected between 53 cents and 59 cents per share [7]. Market Position - Photronics currently holds a Zacks Rank 3 (Hold) and has seen its shares decline 16.1% year to date, contrasting with a 6.7% increase in the Zacks Computer & Technology sector [8]. - Competitors with better rankings include Nutanix (Zacks Rank 1), CrowdStrike (Zacks Rank 2), and Dell Technologies (Zacks Rank 2) [8].