Photronics (PLAB) To Report Q1 Earnings: What's In Store?

Photronics, Inc. (NASDAQ:PLAB) is set to report first-quarter fiscal 2020 results on March 4.

Photronics expects first-quarter revenues between $146 million and $154 million. The Zacks Consensus Estimate for revenues is currently pegged at $150.8 million, which suggests growth of 20.9% from the year-ago quarter’s reported figure.

For the quarter under review, the Zacks Consensus Estimate for earnings has been steady at 16 cents per share in the past 30 days that indicates growth of 100% from the figure reported in the year-ago quarter.

Notably, the company has trailing four-quarter positive earnings surprise of 36.4%, on average.

Let’s see how things have shaped up for this announcement.

Photronics, Inc. Price and EPS Surprise

Key Factors to Consider

Photronics’ fiscal first-quarter performance is expected to have benefited from strong end-market demand for its flat-panel display (FPD) and integrated-circuit (IC) photomasks.

The company’s expanding IC production capacity in Xiamen has well positioned it to meet growing demand for photomasks as companies in China are trying to become independent and self-sufficient.

Notably, the Photronics’ IC capacity in Taiwan and Korea was sold out in fiscal fourth quarter owing to sudden uptick in demand for photomasks in China.

Moreover, strong demand for AMOLED in China and Korea is expected to have contributed to the company’s top-line growth.

Further, strength in mobile displays and ramped up production at Photronics’ FPD facility in Hefei is likely to have driven FPD segment revenues.

However, the company expects revenue growth to be flat in fiscal first quarter due to the seasonal nature of the business.

Moreover, expenses related to the ramping up of production capacity in Photronics’ Xiamen factory are expected to have kept fiscal first-quarter margins under pressure.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Photronics this time around. 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. But that’s not the case here.

Photronics carries a Zacks Rank #3 and has 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 That Warrant a Look

Here are three stocks you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat this season.

Guidewire Software, Inc. (NYSE:GWRE) has an Earnings ESP of +15.39% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tencent Holding Ltd. (OTC:TCEHY) has an Earnings ESP of +6.03% and a Zacks Rank #2.

CrowdStrike Holdings Inc. (NASDAQ:CRWD) has an Earnings ESP of +5.26% and a Zacks Rank #3.

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