What happened

Photronics (NASDAQ:PLAB) stock shot out of the gate at light speed this morning.

Before the open, Photronics reported its fiscal fourth-quarter 2019 financials. Earnings only met analyst estimates for $0.15 per share, but sales eclipsed predictions at $156.3 million -- nearly $9 million more than analysts had expected. Investors are reacting with applause, and Photronics stock is up 19.5% as of 10:25 a.m. EST.

Light racing around a semiconductor chip

Image source: Getty Images.

So what

Photronics, which makes "photomasks" (quartz or glass plates bearing microscopic images of electronic circuits, which are used as guides to manufacture semiconductors and flat panel displays), saw its sales reach new records, growing 8% year over year and 13% sequentially. Revenue from the company's semiconductor business grew only 1% year over year, but flat panel display revenues shot up 29%.

Despite this good news, however, actual earnings for the company declined 17% year over year from last year's $0.18 per share. Still, that number was no worse than analysts had expected.

Now what

What's really driving Photronics' stock price gains today, though, isn't the earnings it made last quarter but its prediction of what it will earn this quarter -- fiscal Q1 2020. According to guidance, Q1 2020 sales will range from $146 million to $154 million, all numbers far ahead of the $143.1 million that Wall Street was banking on.

Earnings should please investors as well, with Photronics management forecasting GAAP profits of between $0.13 and $0.18 per share -- potentially as much as 50% above the $0.12 per share that Wall Street has predicted for the quarter and more than twice what Photronics earned a year ago.

No wonder investors are excited.