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Lam Research (LRCX) Q4 Earnings & Revenues Beat, Fall Y/Y
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Lam Research Corporation (LRCX - Free Report) delivered fourth-quarter fiscal 2023 non-GAAP earnings of $5.98 per share, which surpassed the Zacks Consensus Estimate by 18.9%. The figure decreased 32.3% from the year-ago quarter’s reading.
Revenues of $3.21 billion were above the Zacks Consensus Estimate of $3.12 billion. The figure declined by 30.8% year over year. This was primarily attributed to weakness in the systems business due to sluggish memory spending.
Lam Research’s system revenues were $1.71 billion (53.3% of the total revenues), down 43.1% from the year-ago fiscal quarter’s figure. The reported figure surpassed the Zacks Consensus Estimate of $1.6 billion.
In the Customer Support Business Group, revenues for the reported quarter were $1.49 billion (46.7%), down 8.1% from the year-ago fiscal quarter’s number. The figure lagged the consensus mark of $1.52 billion.
The weak outlook for 2023 wafer fabrication equipment (WFE) spending remains a concern. For 2023, WFE spending is expected to be down in the mid-40% range year over year.
Nevertheless, Lam Research’s proper execution and expanding and diversifying global footprints remain positives. The company remains optimistic about its technological advancements, especially with AI. Also, its strength in 3D DRAM and advanced packaging is a tailwind.
Coming to the price performance, Lam Research has gained 53.8% year to date, outperforming the industry’s growth of 35.5%.
Lam Research Corporation Price, Consensus and EPS Surprise
China, Korea and Taiwan accounted for 26%, 24% and 20% of Lam Research’s total revenues for the fiscal fourth quarter, respectively. Additionally, Japan, Southeast Asia, the United States and Europe accounted for 10%, 4%, 8% and 8%, respectively.
Operating Details
The non-GAAP gross margin was 45.7%, which expanded 50 basis points (bps) from the year-ago fiscal quarter’s level.
Non-GAAP operating expenses were $589.9 million, down 7% from the prior-year fiscal quarter’s reading. As a percentage of revenues, the figure expanded 470 bps from the year-earlier fiscal quarter’s level to 18.4%.
The non-GAAP operating margin was 27.3%, contracting 420 bps from the year-ago fiscal quarter’s level.
Balance Sheet & Cash Flow
As of Jun 25, 2023, cash and cash equivalents and short-term investments were $5.375 billion compared with $5.369 billion as of Mar 26, 2023.
Cash flow from operating activities was $1.12 billion for the reported quarter, down from $1.73 billion in the previous fiscal quarter. Capital expenditure was $78.7 million in fourth-quarter fiscal 2023 compared with $119 million in third-quarter fiscal 2023.
In the reported quarter, Lam Research paid out dividends of $232.3 million and repurchased shares worth $869 million.
Guidance
For first-quarter fiscal 2024, LRCX expects revenues of $3.4 billion (+/- $300 million). The Zacks Consensus Estimate for the same is pegged at $3.24 billion.
The non-GAAP gross margin is projected at 46.5% (+/-1%), while the non-GAAP operating margin is expected to be 28% (+/-1%).
Non-GAAP earnings are projected to be $6.05 (+/- 75 cents) per share on a diluted share count of 133 million. The Zacks Consensus Estimate for the same stands at $5.48 per share.
Zacks Rank and Stocks to Consider
Currently, Lam Research carries a Zacks Rank #3 (Hold).
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Lam Research (LRCX) Q4 Earnings & Revenues Beat, Fall Y/Y
Lam Research Corporation (LRCX - Free Report) delivered fourth-quarter fiscal 2023 non-GAAP earnings of $5.98 per share, which surpassed the Zacks Consensus Estimate by 18.9%. The figure decreased 32.3% from the year-ago quarter’s reading.
Revenues of $3.21 billion were above the Zacks Consensus Estimate of $3.12 billion. The figure declined by 30.8% year over year. This was primarily attributed to weakness in the systems business due to sluggish memory spending.
Lam Research’s system revenues were $1.71 billion (53.3% of the total revenues), down 43.1% from the year-ago fiscal quarter’s figure. The reported figure surpassed the Zacks Consensus Estimate of $1.6 billion.
In the Customer Support Business Group, revenues for the reported quarter were $1.49 billion (46.7%), down 8.1% from the year-ago fiscal quarter’s number. The figure lagged the consensus mark of $1.52 billion.
The weak outlook for 2023 wafer fabrication equipment (WFE) spending remains a concern. For 2023, WFE spending is expected to be down in the mid-40% range year over year.
Nevertheless, Lam Research’s proper execution and expanding and diversifying global footprints remain positives. The company remains optimistic about its technological advancements, especially with AI. Also, its strength in 3D DRAM and advanced packaging is a tailwind.
Coming to the price performance, Lam Research has gained 53.8% year to date, outperforming the industry’s growth of 35.5%.
Lam Research Corporation Price, Consensus and EPS Surprise
Lam Research Corporation price-consensus-eps-surprise-chart | Lam Research Corporation Quote
Regions in Detail
China, Korea and Taiwan accounted for 26%, 24% and 20% of Lam Research’s total revenues for the fiscal fourth quarter, respectively. Additionally, Japan, Southeast Asia, the United States and Europe accounted for 10%, 4%, 8% and 8%, respectively.
Operating Details
The non-GAAP gross margin was 45.7%, which expanded 50 basis points (bps) from the year-ago fiscal quarter’s level.
Non-GAAP operating expenses were $589.9 million, down 7% from the prior-year fiscal quarter’s reading. As a percentage of revenues, the figure expanded 470 bps from the year-earlier fiscal quarter’s level to 18.4%.
The non-GAAP operating margin was 27.3%, contracting 420 bps from the year-ago fiscal quarter’s level.
Balance Sheet & Cash Flow
As of Jun 25, 2023, cash and cash equivalents and short-term investments were $5.375 billion compared with $5.369 billion as of Mar 26, 2023.
Cash flow from operating activities was $1.12 billion for the reported quarter, down from $1.73 billion in the previous fiscal quarter. Capital expenditure was $78.7 million in fourth-quarter fiscal 2023 compared with $119 million in third-quarter fiscal 2023.
In the reported quarter, Lam Research paid out dividends of $232.3 million and repurchased shares worth $869 million.
Guidance
For first-quarter fiscal 2024, LRCX expects revenues of $3.4 billion (+/- $300 million). The Zacks Consensus Estimate for the same is pegged at $3.24 billion.
The non-GAAP gross margin is projected at 46.5% (+/-1%), while the non-GAAP operating margin is expected to be 28% (+/-1%).
Non-GAAP earnings are projected to be $6.05 (+/- 75 cents) per share on a diluted share count of 133 million. The Zacks Consensus Estimate for the same stands at $5.48 per share.
Zacks Rank and Stocks to Consider
Currently, Lam Research carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Salesforce (CRM - Free Report) , Akamai Technologies (AKAM - Free Report) and AvidXchange (AVDX - Free Report) . Salesforce currently sports a Zacks Rank #1 (Strong Buy), and Akamai Technologies and AvidXchange carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Salesforce shares have gained 70.7% in the year-to-date period. The long-term earnings growth rate for CRM is projected at 19.25%.
Akamai shares have risen 9.5% in the year-to-date period. The long-term earnings growth rate for AKAM is projected at 10%.
AvidXchange shares have grown 21.1% in the year-to-date period. The long-term earnings growth rate for AVDX is projected at 22.90%.