Why Lam Research Corp. Stock Gained 10.3% in July
What happened
Lam Research Corp. (NASDAQ: LRCX) stock climbed 10.3 % in July, according to data provided by S&P Global Market Intelligence . The company's share price moved higher in the middle of the month after earnings results and guidance from competitor ASML Holdings LV suggested a stronger semiconductor-equipment industry outlook. However, Lam's biggest stock gains occurred following its own fiscal fourth-quarter earnings release in late July.
Lam reported earnings for the quarter that June 26, after market close on July 26, and delivered results that topped the market's expectations. The stock is now roughly flat year to date.
So what
Lam's sales in Q4 were up 8% year over year to roughly $3.1 billion, but shipments fell roughly 3% to $3 billion. Sales came in roughly $70 million ahead of the mid-range of analysts' targets. Earnings per share landed at $5.31, up 11% year over year, and beating analysts' average estimate of $4.98.
Chief Executive Officer Martin Anstice had this to say:
Lam's June quarter results confirmed 2018 as the strongest fiscal year in our history, with over 11 billion dollars in revenues, approximately 18 dollars in non-GAAP diluted earnings per share and 2.7 billion dollars of cash generated from operations. Essentially unsurpassed in our industry, the multi-year growth at Lam has been enabled by the increased prominence of Etch and Deposition in the semiconductor device manufacturing process flow and the broadening of our product and services portfolio over many years. Our forward-looking optimism is reinforced by the fundamental opportunity of silicon technologies, enabling a new generation of cognitive computing applications and services, combined with the expectation of sustainable investment by our customers, who in turn are pursuing inspiring and enhanced value creation agendas.
Now what
For its fiscal first quarter, which ends in September, Lam expects earnings between $3 per share and $3.40 per share on sales between $2.15 billion and $2.45 billion. The company anticipates long-term tailwinds from the Internet of Things, the growth of the data center market, and increased overall demand for memory chips, but its industry remains very competitive. Shares trade at roughly 12 times this year's expected earnings.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Lam Research. The Motley Fool has a disclosure policy.
