Lam Research Beats on Both Top and Bottom Lines

Lam Research (Nasdaq: LRCX  ) reported earnings on Jan. 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 23 (Q2), Lam Research beat slightly on revenues and beat slightly on earnings per share.

Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share contracted significantly.

Margins dropped across the board.

Revenue details
Lam Research reported revenue of $860.9 million. The 15 analysts polled by S&P Capital IQ predicted a top line of $848.3 million on the same basis. GAAP reported sales were 47% higher than the prior-year quarter's $584.0 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.45. The 17 earnings estimates compiled by S&P Capital IQ forecast $0.44 per share. GAAP EPS of $0.04 for Q2 were 85% lower than the prior-year quarter's $0.27 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 36.6%, 350 basis points worse than the prior-year quarter. Operating margin was 0.6%, 740 basis points worse than the prior-year quarter. Net margin was 0.7%, 500 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $886.5 million. On the bottom line, the average EPS estimate is $0.53.

Next year's average estimate for revenue is $3.61 billion. The average EPS estimate is $2.21.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 339 members out of 367 rating the stock outperform, and 28 members rating it underperform. Among 114 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 106 give Lam Research a green thumbs-up, and eight 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 $42.35.

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