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Why Is Lam Research (LRCX) Up 3% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Lam Research Corporation (LRCX - Free Report) . Shares have added about 3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Lam Research Corporation (LRCX - Free Report) reported second-quarter fiscal 2017 non-GAAP earnings of $2.24 per share, surpassing the Zacks Consensus Estimate of $2.19. Earnings were up 23.7% sequentially and 42.8% year over year.
The stock jumped 1.99% in yesterday’s trading.
Coming to share price performance, the stock outperformed the Zacks Semiconductor Equipment Wafer Fabrication industry in the last one year. It returned 67.30% compared with the industry’s gain of 60.04%.
Revenues
Revenues of $1.88 billion increased 15.3% sequentially and 32.0% year over year. Also, revenues were above the Zacks Consensus Estimate of $1.85 billion.
Revenues by Geography
Region-wise, Taiwan contributed 37%, Korea accounted for 26%, Japan brought in 8%, China contributed 10% and Southeast Asia generated 5%. The U.S. and Europe each accounted for 7% of revenues.
Shipments
Total system shipments were $1.92 billion during the reported quarter, up 12.3% from $1.71 billion reported last quarter.
Margins
Non-GAAP gross profit was $874.2 million or 46.4% of revenues, reflecting an increase of 127 basis points (bps) sequentially and 96 bps year over year.
Total adjusted operating expenses were $384.2 million, 3.4% higher sequentially. Operating margin was 26.0%, reflecting an increase of 362 bps from the prior quarter and 525 bps from the year-ago quarter.
Net Income
GAAP net income was $332.8 million ($1.81 per share) compared with $263.8 million ($1.47 per share) last quarter and $223.0 million ($1.28 per share) in the year-ago quarter.
Non-GAAP net income was $405.2 million (21.5% of sales) compared with $322.1 million (19.7%) last quarter and $270.3 million (19.0%) in the year-ago quarter.
Balance Sheet
Exiting fiscal second-quarter 2017, cash and cash equivalents, short-term investments, and restricted cash and investment balances were $5.8 billion compared with $7.2 billion at the end of fiscal first-quarter 2017.
Cash flow from operating activities was $404.1 million versus $473.2 million in the previous quarter. Capital expenditures amounted to $36.5 million. The company paid $48.4 million in cash dividends to stockholders during the Dec 2016 quarter.
Guidance
Lam Research provided guidance for the third quarter of fiscal 2017.
On a non-GAAP basis, the company expects revenues of approximately $2.350 billion (+/- $75 million). Shipments are projected to be roughly $2.125 billion (+/- $75 million). Gross margin is predicted at around 45.5% (+/-1%), while operating margin is likely to be about 25.5% (+/-1%).
Earnings per share are projected at $2.55 (+/- 10 cents) on a share count of nearly 180 million. The Zacks Consensus Estimate is pegged at $2.34 per share, which makes guidance better than expected. GAAP earnings per share are projected at $2.31 (+/- 10 cents).
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Lam Research's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'D'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable for growth investors and value investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Why Is Lam Research (LRCX) Up 3% Since the Last Earnings Report?
A month has gone by since the last earnings report for Lam Research Corporation (LRCX - Free Report) . Shares have added about 3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Lam Research (LRCX - Free Report) Tops Q2 Earnings, Revenue Estimates
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Lam Research Corporation Price and Consensus
Lam Research Corporation Price and Consensus | Lam Research Corporation Quote
VGM Scores
At this time, Lam Research's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'D'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable for growth investors and value investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.