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What's in the Offing for Lam Research's (LRCX) Q1 Earnings?

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Lam Research Corporation (LRCX - Free Report) is slated to report first-quarter fiscal 2019 results on Oct 23. In the last reported quarter, the company delivered a positive earnings surprise of 6.47%.

Lam Research’s surprise history has been pretty impressive. The company surpassed estimates in each of the trailing four quarters, with the average being 6.52%.

Let’s see how things are shaping up for this announcement.

Factors to Consider

Lam Research has been witnessing increased adoption rates for 3D NAND technology, FinFETs and multi-patterning. The company has been undertaking cost-reduction activities and density scaling for 3D NAND, as well as new memory technologies. All these factors are likely to have aided Lam Research’s top-line growth in the to-be-reported quarter.

For the quarter to be reported, the company expects revenues to be approximately $2.15 billion (+/- $150 million). The Zacks Consensus Estimate for the same is pegged at $2.15 billion, indicating a decline of 8% from the year-ago quarter.

The company has been facing significant competition in all product and service categories in the semiconductor capital equipment market. This trend most likely continued in the third quarter. Weakness in PCs, which may offset the expansion in the 3D NAND, could have affected its fiscal first-quarter earnings.

Lam Research Corporation Price and EPS Surprise

 

Earnings Whispers

Our proven model shows that Lam Research is unlikely to beat estimates in the to-be-reported 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.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Lam Research has a Zacks Rank #3.

Stocks That Warrant a Look

Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post a positive earnings surprise in the quarter to be reported.

Cadence Bancorp (CADE - Free Report) has an Earnings ESP of +6.12% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Veoneer, Inc. has an Earnings ESP of +7.14% and a Zacks Rank #2.

Arrow Electronics, Inc. (ARW - Free Report) has an Earnings ESP of +0.60% and a Zacks Rank of 3.

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