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Lam Research Corp. posted a beat-and-raise quarter in the extended session Wednesday, and reminded analysts that it knows how to handle downturns, while shares rose slightly, adding to gains from the regular session.
Lam Research
LRCX,
shares, which had been up about 3% after hours, stayed slightly positive, following a 2.5% gain to close the regular session at $330.08. Earlier in the day, ASML
ASML,
American depositary receipts rose to finish up 6.3% after the Netherlands-based company also reported a beat-and-raise quarter.
Lam expects fiscal second-quarter adjusted earnings of $9.25 to $10.75 a share on sales of $4.8 billion to $5.4 billion. Analysts on average were projecting earnings of $9.09 a share on revenue of $4.81 billion for the the first quarter, according to FactSet.
Lam Research Chief Executive Tim Archer told analysts on the conference call that the outlook includes new U.S. restrictions on advanced technology that can be sold to China.
“I’ll remind you that we know how to manage this business during the down cycle,” Douglas Bettinger, Lam chief financial officer, told analysts on the call.
The Fremont, Calif. chip-making-equipment supplier reported fiscal first-quarter net income of $1.43 billion, or $10.39 a share, compared with $1.21 billion, or $8.74 a share, in the year-ago period. Adjusted earnings, which exclude amortization and other items, were $10.42 a share, compared with $8.83 a share in the year-ago quarter.
Revenue rose to a record $5.07 billion from $4.64 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast adjusted earnings of $9.57 a share on revenue of $4.92 billion, based on Lam’s forecast of $8.75 to $10.25 a share on sales of $4.6 billion to $5.2 billion.
Lam CEO Archer also broke out an early estimate — one that would normally not be given out until January — including the China restrictions, that 2023 wafer fabrication equipment revenue will drop more than 20%, with memory-chip companies like Micron Technology Inc.
MU,
accounting for a large chunk of that.
“We see wafer fabrication equipment spending in calendar year 2022 below the $90 billion range,” Archer said.
At the end of September, memory-chip maker Micron forecast revenue that was about $1 billion below Street expectations, prompting analysts to ask whether 2022’s sudden chip glut is worse than the one in 2019.
That storyline of a glut got countered heavily earlier Wednesday after Netherlands-based chipmaking-equipment maker ASML Holdings NV also posted a beat-and-raise quarter.
ASML CEO Peter Wennick told analysts that as supply-chain problems ease and become more predictable, he sees shipping rates increasing as the company is able to manufacture backlogged products. That boosted shares of Lam, as well as peers KLA Corp.
KLAC,
and Applied Materials Inc.
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during Wednesday trading.
Lam, ASML, KLA, and Applied Materials all make the complicated machines needed to turn silicon into the wafers needed to manufacture chips.
Supply-chain issues have dogged the chip-making-equipment company, as well as the sector, since last year. KLA is scheduled to report earnings next Wednesday.
Lam Research shares have fallen 54% year to date, compared with a 44% drop in the PHLX Semiconductor Index
SOX,
a 23% decline by the S&P 500 index
SPX,
and a 32% fall in the tech-heavy Nasdaq Composite Index
COMP,
