Photon Dynamics (PHTN) 1Q:08 Results

Estimated Reporting Date	Symbol	Revenue Estimate Current Q	Operating Profit Estimate Current Q	EPS Estimate Current Q	EBITDA Estimate Current Q	Revenue Estimate Next Q	Sequential Revenue Growth Estimate, Percent	Operating Profit Estimate Next Q	EPS Estimate Next Q	EBITDA Estimate Next Q	Revenue Estimate Full Year	Operating Profit Estimate Full Year	EPS Estimate Full Year	EBITDA Estimate Full Year	Revenue Estimate Next Year	Operating Profit Estimate Next Year	EPS Estimate Next Year	EBITDA Estimate Next Year
2/7/2008	PHTN	16.7	(8.6)	(0.32)	(4.6)	24.9	49.20%	(2.7)	(0.11)	0.3	108.2	(8.2)	(0.20)	1,401.1	23,775.5	1,229.3	2.12	1,763.0

From the press release:

Commenting on the results for the quarter, Jeffrey Hawthorne, Photon
Dynamics' president and chief executive officer, said, "The drop in revenue
for the December quarter reflects the adverse conditions of the flat panel
display market in the first half of calendar 2007. In fiscal 2008, the
outlook in the flat panel display market is improving: Panel demand continues
to be strong, panel pricing has firmed, and customers are responding by adding
capacity as evidenced by our record bookings for the quarter."
Hawthorne continued, "Against the backdrop of an improving flat panel
display market, we continue to execute on our three key strategic initiatives
designed to enhance the competitiveness of our FPD business, drive to
sustainable profitability and engage in diversified new business development.
Our bookings in the quarter reflect our competitive strength. The recent
outsourcing agreement with UCT is a critical element of our move to
sustainable profitability and we are executing on our new growth business
initiative with key contract wins in the imaging system business. We are
making good progress and will continue to focus on executing in these areas."
Company Projections for Fiscal Year 2008 Second Quarter
>
The Company estimates revenue for the second quarter of fiscal 2008 to be
between $36.0 and $38.0 million, with a loss per share of $0.11 and $0.05.

That's significantly better than the street has modeled. I think digital TVs have a forced upgrade cycle because of the FCC mandate that analog broadcasts will cease next year. This company has spent a couple of years realigning costs to better position themselves for an upturn in the flat panel display industry and it seems like they'll finally get paid. As a bonus you get the Salvador Imaging business, which could be very successful if they execute. The stock is underfollowed by the street, most analysts having lost interest by now.

This stock is cheap, trading at 1.2 * book value. That, coupled with the increasing business momentum (they're guiding next quarter up 100%, people) and you've probably got a $15 stock in a few months.