Lithographic masks make the magic happen in chip factories. Image source: Photronics.

What: Shares of Photronics (PLAB -2.95%) fell as much as 12.3% on Thursday morning. In the early premarket hours, the maker of lithographic photomasks used for manufacturing of semiconductors and other high-tech devices issued some preliminary results for the first quarter of fiscal year 2016. Let's just say that investors had been hoping for better figures.

So what: Based on unaudited financial records, Photronics now expects first-quarter sales to land near $129 million. GAAP earnings should stop at roughly $0.27 per diluted share. The bottom-line results includes an $0.11-per-share benefit from a one-time sale of foreign assets. Adjusting for this non-standard line item, earnings will come in at approximately $0.16 per diluted share.

Compared to results from the year-ago period, revenues will rise by roughly 4.5% while earnings will more than double.

But Photronics' original guidance for this quarter pointed to sales in the neighborhood of $138 million, yielding earnings of approximately $0.19 per share. That's also where analysts had set up their consensus targets, and Photronics is falling far short of these goals. The preliminary results did land within the original guidance ranges but at the very low ends.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Now what: CEO Peter Kirlin pointed to lumpy sales to high-end logic customers, with particularly weak order flows from foundry customers in Asia. Despite the disappointing sales and earnings, he also noted that earnings and cash flows remained positive -- one bad quarter won't kill the company.

The soft preliminary results did take the wind out of Photronics' sails, though. The stock had surged 10% in just a couple of days in early December, when the company reported strong fourth-quarter results -- and set up good-looking forward guidance that now turned out to be overly optimistic.