New York, May 28, 2026, 12:01 EDT
- Photronics dropped roughly 32% after missing consensus on both quarterly revenue and adjusted earnings.
- The company cited delays in chip-design releases, pressure in memory supply, and geopolitical uncertainty.
- The chip sector was doing better, with the iShares Semiconductor ETF up in late morning U.S. trade.
Photronics shares dropped 32% Thursday, hitting an intraday low of $34.71. The photomask maker reported quarterly earnings that missed estimates and guided down for the current quarter. Shares last traded at $36.22 with heavy volume. The iShares Semiconductor ETF rose 1.35%.
Photronics got attention because investors have used it as a focused bet on demand for advanced chip production. Photomasks, which are quartz or glass plates that help put circuit patterns on semiconductor wafers and display glass, are used early in the manufacturing process. Slower rollout of new designs can cut into revenue fast.
Photronics posted second-quarter revenue of $209.9 million, slipping 0.5% year over year and down 6.7% from the previous quarter. The company reported non-GAAP earnings, which exclude items like foreign-exchange, at 42 cents a share. GAAP net income to shareholders came in at $31.4 million, or 54 cents per diluted share.
Consensus was higher. Investing.com said adjusted earnings missed its 53-cent estimate and revenue was under the $216.7 million forecast. The site also noted the midpoint of Photronics’ third-quarter revenue guidance, $211 million, is below the consensus of $218.5 million.
Chairman and CEO George Macricostas said the market still has “supportive long-term drivers and several temporary headwinds.” He pointed to delayed design releases, high fab-utilization, memory constraints and geopolitical uncertainty. But Macricostas also said the “underlying long-term demand environment remains strong.” markets.businessinsider.com
ICs were the drag, with revenue down 5% year over year to $147.5 million and 11% lower than the prior quarter. Flat-panel display, or FPD, revenue came in better, up 13% to $62.4 million as demand for displays stayed solid.
Photronics management set third-quarter revenue guidance between $207 million and $215 million, with operating margin seen at 18% to 20%. Non-GAAP diluted EPS is expected in a range of 39 cents to 45 cents a share. The outlook didn’t stop the stock’s slide.
Photronics shares dropped even as bigger chip-equipment stocks stayed steady. ASML’s U.S. shares traded up, and KLA slipped just a bit by late morning. The gap put the focus on Photronics’ own news—its report signaled problems tied to shifts in order timing and its outlook, not a general slump for chip stocks.
Photronics said competition is fierce, listing Dai Nippon Printing, Hoya and Toppan Electronics Products as rivals. It also noted that customers often work with multiple photomask suppliers. The company faces competition from in-house photomask units at chip and display makers too.
Photronics faces the risk that delayed orders might not return quickly enough. Chief Financial Officer Eric Rivera told the earnings call that “demand for our product is inherently variable” and warned that visibility is low, with their usual backlog at just one to three weeks. Since much of Photronics’ costs are fixed, even a small number of missed high-end mask orders can hit margins. Benzinga
Photronics is still spending. The company brought in $47.0 million from operations in the quarter and used $45.8 million for capital expenditures. Photronics closed out the period with $637.7 million in cash, cash equivalents and short-term investments, most of that related to joint ventures.
