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.
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.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
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.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
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.
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.
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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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 of Motley 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.