Overview

• U.S. photomask maker's fiscal Q2 revenue fell 0.5% yr/yr, adjusted EPS declined sequentially

• Company cites delayed design releases and memory supply constraints as near-term headwinds

• FPD revenue rose 13% yr/yr while IC revenue fell 5% yr/yr

Outlook

• Photronics expects Q3 revenue between $207 mln and $215 mln

• Company sees Q3 operating margin between 18% and 20%

• Photronics forecasts Q3 non-GAAP diluted EPS between $0.39 and $0.45

Result Drivers

• DELAYED DESIGN RELEASES - Co said certain design releases were delayed due to elevated fab utilization rates, extending new product launch timelines

• MEMORY SUPPLY CONSTRAINTS - Co cited memory supply constraints and related cost pressures for OEMs as near-term headwinds

• GEOPOLITICAL UNCERTAINTY - Co said geopolitical uncertainty contributed to near-term headwinds

Company press release: ID:nGNX3s0fQ3

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 Revenue	Miss	$209.94 mln	$216.66 mln (2 Analysts)
Q2 Adjusted EPS	Miss	$0.42	$0.54 (2 Analysts)
Q2 Net Income		$43.25 mln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the semiconductor equipment & testing peer group is "buy"

• Wall Street's median 12-month price target for Photronics Inc is $48.00, about 10.3% below its May 27 closing price of $53.51

• The stock recently traded at 23 times the next 12-month earnings vs. a P/E of 16 three months ago

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