Please ensure Javascript is enabled for purposes of website accessibility

Why Photronics Stock Jumped 19% Today

By Rich Smith – Dec 8, 2021 at 11:51AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The semiconductor photomask manufacturer just delivered a blockbuster earnings report, and the next one should be even better.

What happened

Shares of semiconductor manufacturing equipment maker Photronics (PLAB -1.61%) exploded higher in Wednesday trading -- up a solid 19% as of 10:35 a.m. ET -- after the company reported strong results for its fiscal 2021 fourth quarter.

Analysts had forecast that Photronics, which produces quartz and glass "photomasks" used as guides to manufacture semiconductors and flat panel displays, would earn $0.25 per share on sales of $175 million. In fact, for the period, which ended Oct. 31, Photronics earned $0.33 per share -- 32% more than predicted -- on sales of $181.3 million.  

Man shouting and dancing as dollar bills rain down against a yellow background

Image source: Getty Images.

So what

Sales for the quarter surged 21% year over year, accelerating rapidly from the 9% pace set for fiscal 2021 as a whole, and helping Photronics to achieve "a fourth consecutive year of record revenue," as CEO Peter Kirlin pointed out. Full-year revenues were $663.8 million.  

Earnings more than tripled for the quarter, compared to fiscal Q4 2020. For the fiscal year, Photronics' earnings rose 71% to $0.89 per share.

Now what

Looking ahead, Kirlin noted that "past investments in targeted technologies are paying off, as margin expansion is accompanying top-line growth," and said the company is "generating gross and operating margins already at the high-end of [Photronics'] three-year target model."

As a result, the company thinks that in the first quarter of its fiscal 2022, it can generate sales of between $178 million and $186 million, and earnings per share in the $0.27 to $0.34 range. For context, the current consensus among Wall Street analysts is that Photronics will earn $0.22 per share on sales of less than $171 million in the quarter.

Conclusion: After crushing earnings estimates last quarter, Photronics is lining up to do it all over again next quarter. No wonder investors are cheering.

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

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.