Photronics PLAB is set to report its first-quarter fiscal 2025 results on Feb. 26.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

For the to-be-reported quarter, PLAB expects revenues between $208 million and $216 million. Non-GAAP earnings are expected to be between 43 cents and 19 cents.

The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing the same once, the average surprise being 3.47%.

Photronics, Inc. Price and EPS Surprise

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

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

Factors Likely to Influence Q1 Results

Photronics' first-quarter of fiscal 2025 performance is expected to have benefited in the Integrated Circuit (IC) and Flat Panel Display (FPD) segments. 

In the fourth quarter of fiscal 2024, PLAB saw a significant 21% surge in high-end IC mask sales, driven largely by increased sales to logic foundries in both Asia and the United States. 

This growth was mainly in nodes like 22-28 nanometers and sub-14 nanometers, which include the specialty Extreme Ultraviolet business. This upside is likely to have driven the demand for high-end photomasks in the to-be-reported quarter. 

The demand for photomasks in the FPD segment is another key growth driver. The market is seeing increased adoption of AMOLED and LTPS display technologies, requiring more advanced photomasks.

Demand for FPD masks, particularly for large G10.5+ panel lines and new display technologies, is expected to have remained strong in the to-be-reported quarter. These advanced panels require larger photomasks with higher average selling prices, which will help drive growth.

However, PLAB’s first-quarter performance is likely to have been hurt by seasonality impacts, including the Chinese New Year slowdown and softer demand for advanced mobile displays.

PLAB Outperforms Peers Despite Market Headwinds

PLAB shares have lost 7.6% in the year-to-date period, underperforming the Zacks Computer & Technology sector’s return of 0.9%. The underperformance can be attributed to soft memory demand and sluggish premium smartphone sales, affecting advanced mobile display demand.

However, the company has outperformed its peers, including Hoya HOCPY and Dai Nippon Printing DNPLY, which also operate in the photomask market. HOCPY and DNPLY shares have plunged 16.8% and 13.6%, respectively, in the year-to-date period.

The company has also outperformed its  Semiconductor Equipment - Photomasks industry peer, which includes Fujifilm FUJIY. FUJIY shares have plunged 23.6% over the same time frame.

What Should Investors Do With PLAB Stock?

Despite strong high-end IC sales and growth in the FPD segment, PLAB has been suffering from sluggish semiconductor industry trends, geopolitical uncertainty and macroeconomic headwinds, which are expected to have hurt the company’s financial performance.

Photronics currently carries a Zacks Rank #3 (Hold), which implies that investors should wait for a favorable time to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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