What happened
Shares of Photronics (PLAB 1.87%) were up more than 12% on Wednesday after the semiconductor company, whose photomask technology is used in integrated circuits (IC) and flat-panel displays (FPD), released second-quarter earnings. The stock is up more than 15% this year.
So what
The company increased revenue sequentially by 9% and year over year by 12% to $229.3 million. Earnings per share (EPS) were reported as $0.65, more than double the first-quarter EPS of $0.23 and the $0.45 EPS of the same period last year. The company said it is seeing strong demand for its IC and FPD products.
While high-end IC demand fell by 9% due to lower demand in Asia, mainstream demand grew 13%.
FPD revenue was particularly strong at $62.3 million, up 14% sequentially and 6% year over year. The company said its FPD sales were helped by increased sales for its AMOLED (active-matrix organic light-emitting diode) technology, used in advanced mobile displays.
The company's revenue guidance for the next quarter landed between $224 million and $234 million, representing a rise of between 1% to 6% year over year, with EPS between $0.48 and $0.54, compared to $0.51 in the second quarter of 2022.
Now what
Despite what has been a rough and volatile start to 2023 for semiconductor equipment makers, Photronics has done well. Its market dominance for photomask equipment has helped it increase margins. The growth of artificial intelligence technology and 5G mobile networks should also help the stock in the coming years. Despite its shares' rise, the stock is still competitively priced, at under 11 times evaluation, so there's easy room for more share price growth.
