Photronics (PLAB) reported its fiscal Q2 2026 results on May 28, with the stock falling as much as 29.2% to $37.90 in early trading.
Revenue came in at $209.9 million, missing Wall Street’s estimate of $216 million. That’s roughly flat year over year — and well short of what investors were expecting.
The stock had been trading near its 52-week high of $56 heading into the print. The steep drop reflects how much was priced in.
GUH
$PLAB -27% in pre-market
Adj EPS: $0.42 vs $0.54 est
REV: $209.940M vs $216.661M est pic.twitter.com/Ae0BRDxmEi— TrendSpider (@TrendSpider) May 28, 2026
On the earnings per share front, non-GAAP EPS landed at $0.42, a 20% miss versus the $0.53 analyst consensus. GAAP diluted EPS of $0.54 came in just a penny above forecast, but that offered little comfort.
Gross margin was 31%, with operating margin at 20.1%, down from 26.4% in the same quarter last year.
Within the business, the Integrated Circuit segment was the main drag. High-end IC revenue fell 5% in the quarter. The Flat Panel Display segment was a bright spot, with revenue up 13%, but it wasn’t enough to offset the IC weakness.
CEO Peter Kirlin pointed to a few factors behind the shortfall: elevated fab utilization rates are delaying new design releases, memory supply constraints are pressuring OEM customers, and geopolitical uncertainty — including the U.S.-Iran conflict — is clouding near-term visibility.
CFO Eric Rivera noted that the conflict “contributed to a cloudy visibility in demand.”
Days Inventory Outstanding came in at 43, five days above the five-year average. That’s a watch item — rising inventory can signal weakening demand if it continues to climb.
Free cash flow improved considerably, coming in at $1.23 million compared to negative $29.1 million a year ago. The company also carries zero debt, which gives it flexibility heading into a tougher period.
Q3 revenue guidance was set at a midpoint of $211 million — below analyst estimates of $218.5 million and essentially flat sequentially.
Non-GAAP EPS guidance for Q3 is projected at $0.42 at the midpoint, also below the $0.52 consensus.
Management continues to flag near-term headwinds while pointing to longer-term investments in U.S. and Korea manufacturing capacity as the growth story. Those expansions are expected to strengthen positioning at the high end of the market in coming years.
Sell-side analysts currently expect revenue to grow 5.2% over the next 12 months, below the sector average. That number may face further revision following this print.
Photronics carries a market cap of $3.16 billion. Prior to the earnings release, the stock had delivered around 216% return over the prior year — making the post-earnings drop all the more sharp in context.
The extended slowdown following Chinese New Year also disrupted typical seasonal patterns, adding another variable to an already complex quarter.
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