Lam Research Beats Analyst Estimates on EPS

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Lam Research (NAS: LRCX) reported earnings on Jan. 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 25 (Q2), Lam Research beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly, and earnings per share shrank significantly.

Margins dropped across the board.

Revenue details
Lam Research tallied revenue of $584 million. The 15 analysts polled by S&P Capital IQ hoped for sales of $571.5 million. Sales were 33% lower than the prior-year quarter's $870.7 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.34. The 18 earnings estimates compiled by S&P Capital IQ anticipated $0.30 per share on the same basis. GAAP EPS of $0.27 for Q2 were 85% lower than the prior-year quarter's $1.78 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 40.1%, 670 basis points worse than the prior-year quarter. Operating margin was 8.0%, 1,970 basis points worse than the prior-year quarter. Net margin was 5.7%, 1,980 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $598.1 million. On the bottom line, the average EPS estimate is $0.41.

Next year's average estimate for revenue is $2.49 billion. The average EPS estimate is $1.97.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 345 members out of 371 rating the stock outperform, and 26 members rating it underperform. Among 142 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 135 give Lam Research a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Lam Research is outperform, with an average price target of $47.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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