What caused PLAB's positive EPS surprise in Q4 2024?

Photronics Inc. (PLAB) experienced a positive EPS surprise in Q4 2024 due to several key factors:

1. Strong Sales in High-End ICs: Photronics saw improved demand for its high-end ICs, particularly those supporting AI and advanced computing technologies. The company reported a 21% quarter-over-quarter growth in high-end IC sales, driven by the increasing demand for leading-edge AI chips.
2. Strategic Investments and Market Expansion: Photronics plans to invest $200 million in 2025, focusing on expanding its IC capacity and capability in the US. This strategic move is aimed at capturing regional growth opportunities and aligns with the increasing demand for advanced display technologies.
3. Stable FPD Growth and Geographic Expansion: The Flat Panel Displays (FPD) segment also contributed to the revenue growth, with a 7% rise in FPD revenue during Q4 2024. Photronics has strategically expanded its presence in high-growth regions, such as China, which has become a major hub for photomask manufacturing.
4. Operational Efficiency and Cost Management: Despite a slight decline in annual revenue, Photronics managed to surpass EPS estimates due to effective cost management and operational efficiency. The company reported a record net income of $131 million for the full year, with a strengthened balance sheet and increased cash and short-term investments.

In summary, Photronics' positive EPS surprise in Q4 2024 can be attributed to strong sales in high-end ICs, strategic investments, stable FPD growth, and operational efficiency. These factors collectively contributed to the company's robust financial performance and exceeded market expectations.