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.
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 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.
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.
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.
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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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. The Motley Fool has no position in any of the stocks mentioned. 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.