Lam Research earnings top Street view, but outlook virtually in line with consensus

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Lam Research Corp. shares slipped in the extended session Wednesday even after the wafer-fab-equipment market’s results topped Wall Street expectations and its earnings forecast midpoint was a penny more than the consensus estimate.

Lam
LRCX,
-0.25%
shares fell 4.5% after hours, following a 1.2% decline to close the regular session at $642.24.

The company reported fiscal first-quarter net income of $887.4 million, or $6.66 a share, down from $1.43 billion, or $10.39 a share, in the year-ago period. Adjusted earnings fell to $6.85 a share from $10.42 in the year-ago period.

Analysts analysts surveyed by FactSet had forecast first-quarter adjusted earnings of $6.15 a share, based on the company’s forecast of $5.30 to $6.80 per share.

Revenue for the quarter fell to $3.48 billion from $5.07 billion in the year-ago period.

Meanwhile, the Street had forecast revenue of $3.42 billion, based on a company forecast of $3.1 billion to $3.7 billion.

The company said it expects fiscal second-quarter earnings of $6.03 to $7.53 a share on revenue of $3.4 billion to $4 billion.

Analysts had estimated second-quarter earnings of $6.77 a share on expected revenue of $3.65 billion.

“Lam continues to deliver strong results despite a cyclically soft year for wafer fabrication equipment spending,” said Tim Archer, Lam Research’ chief executive, in a statement. “There are tremendous growth vectors ahead for Lam, and we are investing strategically to drive long-term outperformance.”

Lam makes the very complicated clean-room machinery used by foundries like Taiwan Semiconductor Manufacturing Co.
TSM,
-1.71%
to process the silicon for chips designed by Nvidia Corp.
NVDA,
-1.49%
and Apple Inc.
AAPL,
-1.23%.

While the U.S. government widened a ban on sales of artificial-intelligence technology to China on Tuesday, analysts were doubtful the new rules would hurt Lam in a material way.

Earlier Wednesday, Netherlands-based ASML Holding NV
ASML,
-1.08%
said orders were lower than what the company had reported in previous quarters, and that customers had become “very cautious with cash.” ASML also said the widened China restrictions would affect only a “limited number” of facilities and have a minimal impact on revenues. 

ASML shares closed down more than 4% Wednesday.

Year to date, Lam Research shares have surged 52.8%, compared with a 34.8% rally in the PHLX Semiconductor Index 
SOX,
-1.34%,
 a 12.4% gain for the S&P 500
SPX,
-1.03%
and a 27.2% rise in the tech-heavy Nasdaq Composite Index
COMP.

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