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What's in the Cards for Photronics' (PLAB) Q2 Earnings?

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Photronics  (PLAB - Free Report) is scheduled to release second-quarter 2022 results on May 25.

The company expects second-quarter 2022 revenues between $188 million and $196 million. Adjusted profit per share is expected to be 32-38 cents.

The Zacks Consensus Estimate for the top line is currently pegged at $192.55 million, suggesting growth of 20.52% from the year-ago quarter.

The consensus mark for second-quarter earnings has been unchanged at 35 cents per share, indicating a year-over-year improvement of 105.88%.

Photronics, Inc. Price and EPS Surprise

Photronics, Inc. Price and EPS Surprise

Photronics, Inc. price-eps-surprise | Photronics, Inc. Quote

Factors to Note

Photronics’ second-quarter performance is likely to have benefited from the company’s expansion in China, which is the fastest-growing market globally for semiconductors and displays.

The company’s long-term initiative to build new IC and FPD factories in China has been acting as a key catalyst. In the second quarter, Photronics might have gained from ramping up full capacity in the FPD and IC factories to meet the rising demand for photomasks.

The rising demand for AMOLED displays owing to their increasing necessity in the smartphone market may have aided the to-be-reported quarter’s performance. The escalating requirement for AMOLED displays is likely to have contributed to the growth of the FPD business.

The growing demand for legacy semiconductor foundry is expected to have favored the growth in the ASICs market. This is expected to have driven Photronics’ revenues on account of increased demand in the mask sector. Due to the ongoing supply shortage, the company is expected to have gained from pricing leverage in the quarter to be reported.

However, rising supply chain constraints due to lockdowns in China are expected to have negatively impacted the FPD photomask market. This, in turn, might get reflected in the company’s to-be-reported quarter’s top line. The company’s dependence on the Chinese market for a significant portion of its profits amid the rising economic volatility and rising geopolitical tensions might have weighed on its second-quarter performance.

What Our Model Indicates

Our proven model doesn’t conclusively predict an earnings beat for Photronics this time around. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here.

PLAB has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some better-ranked stocks to consider in the broader sector to gain more returns.

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