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Lam Research Beats on EPS But GAAP Results Lag

By Seth Jayson - Updated Apr 10, 2017 at 1:41PM

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Just the facts, Fool.

Lam Research (Nasdaq: LRCX) reported earnings on April 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q3), Lam Research met expectations on revenues and beat expectations on earnings per share.

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

Margins shrank across the board.

Revenue details
Lam Research reported revenue of $844.9 million. The 14 analysts polled by S&P Capital IQ predicted revenue of $837.7 million on the same basis. GAAP reported sales were 28% higher than the prior-year quarter's $659.0 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 $0.44. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.36 per share. Non-GAAP EPS of $0.44 for Q3 were 12% lower than the prior-year quarter's $0.50 per share. GAAP EPS of $0.11 for Q3 were 71% lower than the prior-year quarter's $0.38 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 40.2%, 30 basis points worse than the prior-year quarter. Operating margin was 1.3%, 930 basis points worse than the prior-year quarter. Net margin was 2.2%, 470 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $925.6 million. On the bottom line, the average EPS estimate is $0.63.

Next year's average estimate for revenue is $3.53 billion. The average EPS estimate is $2.00.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 341 members out of 368 rating the stock outperform, and 27 members rating it underperform. Among 110 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 102 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 $46.87.

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Stocks Mentioned

Lam Research Corporation Stock Quote
Lam Research Corporation
LRCX
$474.12 (0.42%) $1.99

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