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Photronics (PLAB) Q3 Earnings Top Estimates, Revenues Up Y/Y
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Photronics (PLAB - Free Report) reported third-quarter fiscal 2022 non-GAAP earnings of 51 cents per share, which surpassed the Zacks Consensus Estimate by 2% and improved a whopping 82.1% year over year.
Revenues of $219.9 million beat the consensus mark by 4.74% and surged 29% year over year. The performance reflects the positive impact of Photronics’ growth strategy of investing extensively in technologies that are market drivers and partnering with customers by establishing long-term agreements.
This enables the company to ramp up returns from investments quickly, as reflected in the reported quarter’s results.
Photronics, Inc. Price, Consensus and EPS Surprise
In the fiscal third quarter, demand for photomask remained strong for Integrated Circuit and Flat Panel Display, both high-end and mainstream applications.
Integrated Circuit (73.2% of total revenues) revenues climbed 11% sequentially and 37% year over year to $161 million, reflecting strong demand for photo masks. Besides EUV applications, demand for semiconductor content in consumer goods like electronics, automotive and appliances drove demand for integrated circuits among foundries in Asia and the United States.
Flat Panel Display (26.8% of total revenues) revenues rose 11% year over year to $59 million, driven by strong high-end demand during the quarter as both AMOLED for mobile displays and G10.5+ for ultra-large screen TVs were up in strong double-digit percentages compared with both the fiscal second quarter and last year.
Third-quarter fiscal 2022 gross margin expanded to 38.1% from 26.6% in the year-ago period.
Research & development expenses, as a percentage of revenues, decreased 120 basis points (bps) year over year to 1.9%. Sales and marketing expenses, as a percentage of revenues, declined 160 bps year over year to 7.3%.
Operating income was $63.7 million, up 123.9% year over year. Operating margin expanded 1,230 bps from the year-ago quarter to 29%.
Gross and operating margins improved in the fiscal third quarter, benefiting from high leverage in the company’s operating model and declining costs.
Balance Sheet& Cash Flow
As of Jul 31, 2022, cash and cash equivalents were $380.8 million compared with $329 million as of May 1, 2022.
As of Jul 31, 2022, cash flow from operation was $195.9 million compared with $113.09 million from the year-ago quarter.
Capex for the fiscal third quarter was $12 million, bringing year-to-date capex to $45 million net of government subsidies. The company projects spending of about $100 million this fiscal year, although some of the remaining spend could be carried over into the next fiscal year.
Guidance
For the fiscal fourth quarter of 2022, Photronics expects revenues between $205 million and $215 million.
Earnings per share for the third quarter are expected between 44 cents and 52 cents.
Image: Bigstock
Photronics (PLAB) Q3 Earnings Top Estimates, Revenues Up Y/Y
Photronics (PLAB - Free Report) reported third-quarter fiscal 2022 non-GAAP earnings of 51 cents per share, which surpassed the Zacks Consensus Estimate by 2% and improved a whopping 82.1% year over year.
Revenues of $219.9 million beat the consensus mark by 4.74% and surged 29% year over year. The performance reflects the positive impact of Photronics’ growth strategy of investing extensively in technologies that are market drivers and partnering with customers by establishing long-term agreements.
This enables the company to ramp up returns from investments quickly, as reflected in the reported quarter’s results.
Photronics, Inc. Price, Consensus and EPS Surprise
Photronics, Inc. price-consensus-eps-surprise-chart | Photronics, Inc. Quote
Quarter Details
In the fiscal third quarter, demand for photomask remained strong for Integrated Circuit and Flat Panel Display, both high-end and mainstream applications.
Integrated Circuit (73.2% of total revenues) revenues climbed 11% sequentially and 37% year over year to $161 million, reflecting strong demand for photo masks. Besides EUV applications, demand for semiconductor content in consumer goods like electronics, automotive and appliances drove demand for integrated circuits among foundries in Asia and the United States.
Flat Panel Display (26.8% of total revenues) revenues rose 11% year over year to $59 million, driven by strong high-end demand during the quarter as both AMOLED for mobile displays and G10.5+ for ultra-large screen TVs were up in strong double-digit percentages compared with both the fiscal second quarter and last year.
Third-quarter fiscal 2022 gross margin expanded to 38.1% from 26.6% in the year-ago period.
Research & development expenses, as a percentage of revenues, decreased 120 basis points (bps) year over year to 1.9%. Sales and marketing expenses, as a percentage of revenues, declined 160 bps year over year to 7.3%.
Operating income was $63.7 million, up 123.9% year over year. Operating margin expanded 1,230 bps from the year-ago quarter to 29%.
Gross and operating margins improved in the fiscal third quarter, benefiting from high leverage in the company’s operating model and declining costs.
Balance Sheet& Cash Flow
As of Jul 31, 2022, cash and cash equivalents were $380.8 million compared with $329 million as of May 1, 2022.
As of Jul 31, 2022, cash flow from operation was $195.9 million compared with $113.09 million from the year-ago quarter.
Capex for the fiscal third quarter was $12 million, bringing year-to-date capex to $45 million net of government subsidies. The company projects spending of about $100 million this fiscal year, although some of the remaining spend could be carried over into the next fiscal year.
Guidance
For the fiscal fourth quarter of 2022, Photronics expects revenues between $205 million and $215 million.
Earnings per share for the third quarter are expected between 44 cents and 52 cents.
Zacks Rank and Stocks to Consider
Photronics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PLAB’s shares have decreased 11.8% in the year-to-date period, compared with the Zacks Semiconductor Equipment - Photomasks industry, which increased 15.5%. Meanwhile, the Computer and Technology sector declined 27.3%.
Here are some better-ranked stocks worth considering in the broader Computer and Technology Sector.
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ASX’s shares have slumped 22.4% in the year-to-date period compared with the Zacks Electronics - Semiconductors industry’s decline of 21.8%.
Monolithic Power Systems (MPWR - Free Report) carries a Zacks Rank of 2, currently.
MPWR’s shares have risen 3.5% in the year-to-date period against the Zacks Semiconductor - Analog and Mixed industry’s decline of 11.4%.
Arista Networks (ANET - Free Report) presently sports a Zacks Rank of 1.
ANET’s shares have dropped 12.9% in the year-to-date period compared with the Zacks Communication - Components industry’s decline of 12.7%.