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Lam Research (LRCX) Q4 Earnings Beat, Revenues Increase Y/Y
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Lam Research Corporation (LRCX - Free Report) delivered fourth-quarter fiscal 2024 non-GAAP earnings of $8.14 per share, which surpassed the Zacks Consensus Estimate by 8.2%. The figure increased 36.1% from the year-ago quarter.
Revenues of $3.87 billion surpassed the Zacks Consensus Estimate of $3.81 billion. The figure increased 20.7% year over year.
Year-over-year growth in the top line was driven by the strong performance of the Customer Support Business Group and the rebound in the System business. Improving memory spending was a plus.
Lam Research’s System revenues were $2.17 billion (56% of the total revenues), up 26.9% from the year-ago quarter. The reported figure missed the Zacks Consensus Estimate of $2.38 billion.
In the Customer Support Business Group, revenues for the reported quarter were $1.7 billion (44% of the total revenues), up 13.7% from the year-ago quarter. The figure topped the consensus mark of $1.43 billion.
Coming to the price performance, LRCX has gained 18% year to date, outperforming the industry’s growth of 15.5%.
Lam Research remains optimistic about its strategic investments in research and development activities, and operations, which position it well to capitalize on the growing wafer fab equipment (WFE) spending.
For 2024, WFE is expected to be in the mid-$90-billion range. Foundry/logic, DRAM and NAND investments are expected to be higher on a year-over-year basis. Growing demand related to high-bandwidth memory ramp is a positive.
Strengthening domestic spending in China is a plus.
However, global spending on mature nodes is likely to be flat year over year.
Lam Research Corporation Price, Consensus and EPS Surprise
China, Korea and Taiwan accounted for 39%, 18% and 15%, respectively, of Lam Research’s total revenues for the fiscal fourth quarter. Japan, Southeast Asia, the United States and Europe accounted for 7%, 8%, 10% and 3%, respectively.
Operating Details
The non-GAAP gross margin was 48.5%, which expanded 280 basis points (bps) from the year-ago quarter.
Non-GAAP operating expenses were $697.7 million, up 16.8% from the prior-year quarter. As a percentage of revenues, the figure contracted 60 bps from the year-earlier quarter to 17.8%.
The non-GAAP operating margin was 30.7%, expanding 340 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2024, cash and cash equivalents were $5.85 billion compared with $5.67 billion as of Mar 31, 2024.
Cash flow from operating activities was $862.43 million for the reported quarter, down from $1.38 billion in the previous quarter.
In the reported quarter, Lam Research paid out dividends of $261 million and repurchased shares worth $382 million.
Guidance
For first-quarter fiscal 2025, LRCX expects revenues of $4.05 billion (+/- $300 million). The Zacks Consensus Estimate for the same is pegged at $3.98 billion.
The non-GAAP gross margin is projected at 47% (+/-1%), whereas the non-GAAP operating margin is expected to be 29.5% (+/-1%).
Non-GAAP earnings are projected to be $8.00 (+/- 75 cents) per share on a diluted share count of 131 million. The Zacks Consensus Estimate for the same is pinned at $7.98 per share.
Zacks Rank & Stocks to Consider
Currently, Lam Research carries a Zacks Rank #3 (Hold).
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Lam Research (LRCX) Q4 Earnings Beat, Revenues Increase Y/Y
Lam Research Corporation (LRCX - Free Report) delivered fourth-quarter fiscal 2024 non-GAAP earnings of $8.14 per share, which surpassed the Zacks Consensus Estimate by 8.2%. The figure increased 36.1% from the year-ago quarter.
Revenues of $3.87 billion surpassed the Zacks Consensus Estimate of $3.81 billion. The figure increased 20.7% year over year.
Year-over-year growth in the top line was driven by the strong performance of the Customer Support Business Group and the rebound in the System business. Improving memory spending was a plus.
Lam Research’s System revenues were $2.17 billion (56% of the total revenues), up 26.9% from the year-ago quarter. The reported figure missed the Zacks Consensus Estimate of $2.38 billion.
In the Customer Support Business Group, revenues for the reported quarter were $1.7 billion (44% of the total revenues), up 13.7% from the year-ago quarter. The figure topped the consensus mark of $1.43 billion.
Coming to the price performance, LRCX has gained 18% year to date, outperforming the industry’s growth of 15.5%.
Lam Research remains optimistic about its strategic investments in research and development activities, and operations, which position it well to capitalize on the growing wafer fab equipment (WFE) spending.
For 2024, WFE is expected to be in the mid-$90-billion range. Foundry/logic, DRAM and NAND investments are expected to be higher on a year-over-year basis. Growing demand related to high-bandwidth memory ramp is a positive.
Strengthening domestic spending in China is a plus.
However, global spending on mature nodes is likely to be flat year over year.
Lam Research Corporation Price, Consensus and EPS Surprise
Lam Research Corporation price-consensus-eps-surprise-chart | Lam Research Corporation Quote
Regions in Detail
China, Korea and Taiwan accounted for 39%, 18% and 15%, respectively, of Lam Research’s total revenues for the fiscal fourth quarter. Japan, Southeast Asia, the United States and Europe accounted for 7%, 8%, 10% and 3%, respectively.
Operating Details
The non-GAAP gross margin was 48.5%, which expanded 280 basis points (bps) from the year-ago quarter.
Non-GAAP operating expenses were $697.7 million, up 16.8% from the prior-year quarter. As a percentage of revenues, the figure contracted 60 bps from the year-earlier quarter to 17.8%.
The non-GAAP operating margin was 30.7%, expanding 340 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2024, cash and cash equivalents were $5.85 billion compared with $5.67 billion as of Mar 31, 2024.
Cash flow from operating activities was $862.43 million for the reported quarter, down from $1.38 billion in the previous quarter.
In the reported quarter, Lam Research paid out dividends of $261 million and repurchased shares worth $382 million.
Guidance
For first-quarter fiscal 2025, LRCX expects revenues of $4.05 billion (+/- $300 million). The Zacks Consensus Estimate for the same is pegged at $3.98 billion.
The non-GAAP gross margin is projected at 47% (+/-1%), whereas the non-GAAP operating margin is expected to be 29.5% (+/-1%).
Non-GAAP earnings are projected to be $8.00 (+/- 75 cents) per share on a diluted share count of 131 million. The Zacks Consensus Estimate for the same is pinned at $7.98 per share.
Zacks Rank & Stocks to Consider
Currently, Lam Research carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Badger Meter (BMI - Free Report) , Arista Networks (ANET - Free Report) and Apple (AAPL - Free Report) . Badger Meter sports a Zacks Rank #1 (Strong Buy) at present, and Arista Networks and Apple carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Badger Meter shares have gained 32.7% in the year-to-date period. The long-term earnings growth rate for BMI is projected at 17.92%.
Arista Networks shares have gained 41.5% in the year-to-date period. The long-term earnings growth rate for ANET is expected to be 16.07%.
Apple shares have gained 19% in the year-to-date period. The long-term earnings growth rate for AAPL is anticipated to be 12.71%.