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Lam Research (LRCX) Q4 Earnings & Revenues Beat Estimates
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Lam Research Corporation (LRCX - Free Report) reported fourth-quarter fiscal 2018 non-GAAP earnings of $5.31 per share, which beat the Zacks Consensus Estimate of $4.98. The figure also increased 11% sequentially and 71% on a year-over-year basis.
Adjusted revenues increased 8.1% sequentially and 33.3% year over year to $3.13 billion, beating the Zacks Consensus Estimate of $3.09 billion.
The year-over-year growth is attributed to robust performance of both etch and deposition technologies that resulted in expansion of serviceable addressable market of the company.
Total system shipments were $3.03 billion during the fourth quarter, down 3% sequentially. Also, shipments were within management’s guidance of $3 billion (+/- $150 million).
Following the company’s strong quarterly results, share price of Lam Research was up 4.7% in after-hours trading. Also, shares of Lam Research have gained 4.1% in the past 12 months, significantly underperforming the industry’s 20.8% rally.
Top Line in Detail
In the quarter, Korea, China, Japan and Taiwan accounted for 35%, 21%, 18% and 10% of the company’s total revenues. Both the United States and Southeast Asia contributed 5%, while European contribution was 6%.
The company experienced rising demand for DRAM application and NAND Flash that led to increasing adoption of dielectric etch technology. Moreover, Lam Research benefited from its transition to new data-enabled economy, in which DRAM and NAND continue to gain from density growth.
Growing Shipments
Shipment increase was driven mostly by improved memory shipments that accounted for 80% of the total shipments. Non-volatile memory shipments contributed to 55% and DRAM shipments’ contribution was 25%.
The Foundry segment of the company contributed 13%, while Logic and other segment contribution was 7% to total shipments.
Operating Details
Non-GAAP gross profit came in at $1.5 billion or 48% of revenues, which expanded 120 basis points (bps) on a sequential basis.
Non-GAAP operating expenses were $507.4 million, reflecting an increase of 4.4% sequentially. As a percentage of sales, research and development expenses increased, while selling, general and administrative expenditure marked a decline.
Adjusted operating margin was 31.8%, expanding 180 bps sequentially. The increase was due to stronger gross margin performance.
Balance Sheet & Cash Flow
At the end of fiscal fourth quarter, cash and cash equivalents, short-term investments, and restricted cash and investment balances came inat $4.95 billion compared with $6.48 billion in the prior quarter.
Cash flow from operating activities was $718.4 million, down from $1.01 billion in the last reported quarter. Capital expenditure amounted to $79.7 million versus $49 million in the fiscal third quarter.
During the quarter, Lam Research paid $82 million in cash dividends to its stock holders.
Guidance
For first-quarter fiscal 2019, Lam Research’s revenues are projected at $2.3 billion (+/- $150 million) and the Zacks Consensus Estimate is pegged at $2.82 billion. Management believes that memory spending will decrease in the quarter.
Gross margin is predicted at around 46% (+/-1%), while operating margin is expected to come in at 26% (+/-1%).
Non-GAAP earnings per share are projected at $3.20 (+/- 20 cents) on a share count of nearly 163 million. The Zacks Consensus Estimate is pegged at $4.00 per share. GAAP earnings per share are projected at $2.98 (+/- 20 cents).
Lam Research Corporation Price, Consensus and EPS Surprise
Currently, Lam Research carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Groupon (GRPN - Free Report) , IAC/InterActiveCorp (IAC - Free Report) and FactSet Research Systems Inc. (FDS - Free Report) . While Groupon and IAC/InterActiveCorp sport a Zacks Rank #1 (Strong Buy), FactSet holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Groupon, IAC/InterActiveCorp and FactSet is currently projected to be 3%, 7.5% and 10.62%, respectively.
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New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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Lam Research (LRCX) Q4 Earnings & Revenues Beat Estimates
Lam Research Corporation (LRCX - Free Report) reported fourth-quarter fiscal 2018 non-GAAP earnings of $5.31 per share, which beat the Zacks Consensus Estimate of $4.98. The figure also increased 11% sequentially and 71% on a year-over-year basis.
Adjusted revenues increased 8.1% sequentially and 33.3% year over year to $3.13 billion, beating the Zacks Consensus Estimate of $3.09 billion.
The year-over-year growth is attributed to robust performance of both etch and deposition technologies that resulted in expansion of serviceable addressable market of the company.
Total system shipments were $3.03 billion during the fourth quarter, down 3% sequentially. Also, shipments were within management’s guidance of $3 billion (+/- $150 million).
Following the company’s strong quarterly results, share price of Lam Research was up 4.7% in after-hours trading. Also, shares of Lam Research have gained 4.1% in the past 12 months, significantly underperforming the industry’s 20.8% rally.
Top Line in Detail
In the quarter, Korea, China, Japan and Taiwan accounted for 35%, 21%, 18% and 10% of the company’s total revenues. Both the United States and Southeast Asia contributed 5%, while European contribution was 6%.
The company experienced rising demand for DRAM application and NAND Flash that led to increasing adoption of dielectric etch technology. Moreover, Lam Research benefited from its transition to new data-enabled economy, in which DRAM and NAND continue to gain from density growth.
Growing Shipments
Shipment increase was driven mostly by improved memory shipments that accounted for 80% of the total shipments. Non-volatile memory shipments contributed to 55% and DRAM shipments’ contribution was 25%.
The Foundry segment of the company contributed 13%, while Logic and other segment contribution was 7% to total shipments.
Operating Details
Non-GAAP gross profit came in at $1.5 billion or 48% of revenues, which expanded 120 basis points (bps) on a sequential basis.
Non-GAAP operating expenses were $507.4 million, reflecting an increase of 4.4% sequentially. As a percentage of sales, research and development expenses increased, while selling, general and administrative expenditure marked a decline.
Adjusted operating margin was 31.8%, expanding 180 bps sequentially. The increase was due to stronger gross margin performance.
Balance Sheet & Cash Flow
At the end of fiscal fourth quarter, cash and cash equivalents, short-term investments, and restricted cash and investment balances came inat $4.95 billion compared with $6.48 billion in the prior quarter.
Cash flow from operating activities was $718.4 million, down from $1.01 billion in the last reported quarter. Capital expenditure amounted to $79.7 million versus $49 million in the fiscal third quarter.
During the quarter, Lam Research paid $82 million in cash dividends to its stock holders.
Guidance
For first-quarter fiscal 2019, Lam Research’s revenues are projected at $2.3 billion (+/- $150 million) and the Zacks Consensus Estimate is pegged at $2.82 billion. Management believes that memory spending will decrease in the quarter.
Gross margin is predicted at around 46% (+/-1%), while operating margin is expected to come in at 26% (+/-1%).
Non-GAAP earnings per share are projected at $3.20 (+/- 20 cents) on a share count of nearly 163 million. The Zacks Consensus Estimate is pegged at $4.00 per share. GAAP earnings per share are projected at $2.98 (+/- 20 cents).
Lam Research Corporation Price, Consensus and EPS Surprise
Lam Research Corporation Price, Consensus and EPS Surprise | Lam Research Corporation Quote
Zacks Rank & Stocks to Consider
Currently, Lam Research carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Groupon (GRPN - Free Report) , IAC/InterActiveCorp (IAC - Free Report) and FactSet Research Systems Inc. (FDS - Free Report) . While Groupon and IAC/InterActiveCorp sport a Zacks Rank #1 (Strong Buy), FactSet holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Groupon, IAC/InterActiveCorp and FactSet is currently projected to be 3%, 7.5% and 10.62%, respectively.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>