Back to top

Image: Bigstock

Lam Research (LRCX) to Report Q1 Earnings: What's in Store?

Read MoreHide Full Article

Lam Research Corporation (LRCX - Free Report) is scheduled to report fiscal first-quarter 2022 results on Oct 20.

For the fiscal first quarter, the company expects revenues to be $4.3 billion (+/- $250 million). The Zacks Consensus Estimate for sales is pegged at $4.3 billion, indicating growth of 35.5% from the year-ago reported value.

Further, it anticipates non-GAAP earnings per share of $8.10 (+/- 50 cents) for fiscal first-quarter 2022. The consensus mark for earnings per share is pegged at $8.13, indicating a 43.4% rise from the previous-year reported figure.

It surpassed the Zacks Consensus Estimate in all the trailing four quarters, with the average being 9.6%.

Lam Research Corporation Price and EPS Surprise

Lam Research Corporation Price and EPS Surprise

Lam Research Corporation price-eps-surprise | Lam Research Corporation Quote

Key Factors to Note

Lam Research is likely to have gained from continued strong demand for semiconductor equipment in the to-be-reported quarter. Rising demand for semiconductor devices owing to the growing adoption of artificial intelligence, 5G and Internet of Things technologies might have acted as a tailwind.

In addition, the growing usage of DRAM and NAND in consumer products including wearables is anticipated to have aided growth of the company’s memory segment during the quarter under review.

Further, strengthening foundry-logic spending including leading-edge nodes is expected to have remained a major tailwind.

Apart from this, rising complexity related to device manufacturing and growing regional investments are likely to have continued favoring wafer fabrication equipment spending.

Lam Research’s suite of selective etch products is also expected to aid the to-be-reported quarter’s results. Its RF plasma pulsing capability is likely to have persistently helped the company in sustaining momentum in the multi-patterning etch market. The solution might have also helped it in winning new extreme ultraviolet patterning steps.

Further, growing investments in research & development as well as shipments from the recently opened factory in Malaysia are likely to have remained positives for the company in the to-be-reported quarter.

Additionally, increasing adoption of the Sense.i platform is likely to have benefited its performance in the fiscal first quarter.

Also, persistent strength in the systems and customer support business group is likely to have been a tailwind in the quarter under review.
Further, service upgrades and strength in the Reliant product line business are expected to have contributed well to the company’s performance in the quarter under review.

Yet, high air freight and logistic costs as a result of the ongoing coronavirus pandemic are likely to get reflected in fiscal first-quarter results.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Lam Research this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

It has an Earnings ESP of 0.00% and a Zacks Rank #3, at present.

Stocks to Consider

Here are some stocks that you may consider as our model shows that these have the right combination of elements to beat on earnings this season.

Advanced Micro devices (AMD - Free Report) has an Earnings ESP of +2.31% and a Zacks Rank of 2, at present.

ASGN Incorporated (ASGN - Free Report) has an Earnings ESP of +3.29% and a Zacks Rank of 2, at present. (CRM - Free Report) has an Earnings ESP of +6.69% and a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.