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What to Expect from Lam Research (LRCX) in Q3 Earnings?
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Lam Research Corporation (LRCX - Free Report) is set to report third-quarter fiscal 2017 results on Apr 18, after the bell.
Of late, the company’s earnings surprise history has been impressive. It has beaten estimates in each of the last four quarters with an average beat of 5.39%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Lam Research delivered strong fiscal second-quarter 2017 results with both earnings and revenues outperforming the Zacks Consensus Estimate.
The company continues to see strong success in the areas of device architecture, process flow and advanced packaging technology. Its share of the semiconductor wafer fab equipment (WFE) market has increased significantly since 2013 and the momentum is expected to continue.
Lam Research continues to see increased adoption rates of 3D NAND technology, FinFETs and multi-patterning. The company has initiated cost reduction and density scaling for 3D NAND and new memory technologies.
The company is likely to remain the market leader in dielectric etches as VECTOR Strata and ALTUS deposition and its Flex and Kiyo etch products have been extremely successful so far. It anticipates strong demand for leading-edge silicon in the enterprise market to continue driven by the long-term move to the cloud, storage and networking applications.
Moreover, Lam Research is making good progress with its customer support business and anti-trust agency reviews.
However, concerns persist in the form of volatility and lower growth expectations globally, with a slow but steady improvement in some developed markets balancing the weakness in certain emerging economies.
For the fiscal third-quarter, Lam Research expects revenues of approximately $2.350 billion (+/- $75 million) on a non-GAAP basis. Shipments are projected to be roughly $2.125 billion (+/- $75 million). Gross margin is predicted at around 45.5% (+/-1%), while operating margin is likely to be about 25.5% (+/-1%). Non-GAAP earnings are projected at $2.55 (+/- 10 cents) per share on a share count of nearly 180 million.
Lam Research Corporation Price, Consensus and EPS Surprise
Our proven model does not conclusively show that Lam Research will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: The Most Accurate estimate stands at $2.52 whereas the Zacks Consensus Estimate is pegged at $2.54. Therefore, the Earnings ESP for the stock is -0.79%%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lam Research’s Zacks Rank #2 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks that you may want to consider as our model shows these have the right combination of elements to post a positive earnings surprise:
KLA-Tencor Corporation (KLAC - Free Report) with an Earnings ESP of +2.60% and a Zacks Rank #2.
Fortive Corporation (FTV - Free Report) with an Earnings ESP of +1.75% and a Zacks Rank #2.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>.
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What to Expect from Lam Research (LRCX) in Q3 Earnings?
Lam Research Corporation (LRCX - Free Report) is set to report third-quarter fiscal 2017 results on Apr 18, after the bell.
Of late, the company’s earnings surprise history has been impressive. It has beaten estimates in each of the last four quarters with an average beat of 5.39%.
We also note that year to date, the company’s share price has appreciated 52.5% compared with the Zacks Semiconductor Equipment - Wafer Fabrication industry’s gain of 47.6%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Lam Research delivered strong fiscal second-quarter 2017 results with both earnings and revenues outperforming the Zacks Consensus Estimate.
The company continues to see strong success in the areas of device architecture, process flow and advanced packaging technology. Its share of the semiconductor wafer fab equipment (WFE) market has increased significantly since 2013 and the momentum is expected to continue.
Lam Research continues to see increased adoption rates of 3D NAND technology, FinFETs and multi-patterning. The company has initiated cost reduction and density scaling for 3D NAND and new memory technologies.
The company is likely to remain the market leader in dielectric etches as VECTOR Strata and ALTUS deposition and its Flex and Kiyo etch products have been extremely successful so far. It anticipates strong demand for leading-edge silicon in the enterprise market to continue driven by the long-term move to the cloud, storage and networking applications.
Moreover, Lam Research is making good progress with its customer support business and anti-trust agency reviews.
However, concerns persist in the form of volatility and lower growth expectations globally, with a slow but steady improvement in some developed markets balancing the weakness in certain emerging economies.
For the fiscal third-quarter, Lam Research expects revenues of approximately $2.350 billion (+/- $75 million) on a non-GAAP basis. Shipments are projected to be roughly $2.125 billion (+/- $75 million). Gross margin is predicted at around 45.5% (+/-1%), while operating margin is likely to be about 25.5% (+/-1%). Non-GAAP earnings are projected at $2.55 (+/- 10 cents) per share on a share count of nearly 180 million.
Lam Research Corporation Price, Consensus and EPS Surprise
Lam Research Corporation Price, Consensus and EPS Surprise | Lam Research Corporation Quote
Earnings Whispers
Our proven model does not conclusively show that Lam Research will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: The Most Accurate estimate stands at $2.52 whereas the Zacks Consensus Estimate is pegged at $2.54. Therefore, the Earnings ESP for the stock is -0.79%%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lam Research’s Zacks Rank #2 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks that you may want to consider as our model shows these have the right combination of elements to post a positive earnings surprise:
Applied Materials, Inc. (AMAT - Free Report) with an Earnings ESP of +1.32% and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
KLA-Tencor Corporation (KLAC - Free Report) with an Earnings ESP of +2.60% and a Zacks Rank #2.
Fortive Corporation (FTV - Free Report) with an Earnings ESP of +1.75% and a Zacks Rank #2.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>.