Categories Earnings, Technology

Lam Research (LRCX) likely to post weak Q1 2020 earnings

Lam Research Corporation (NASDAQ: LRCX) is set to report its earnings results for the first quarter of 2020 on Wednesday after the market closes. The results will be hurt by multiple headwinds including the US-China trade tariffs softening global economy, the cryptocurrency crash, and the weak demand for memory equipment.

The majority of the top line comes from the memory equipment segment that includes equipment for dynamic random-access memory (DRAM) and non-volatile memory (NVM) production. The company will experience a lower customer base due to weak demand for products including NVM, DRAM, and logic devices.

The company could face an increase in the semiconductor capital expenditures spending on memory equipment due to its investment to keep up with the market demand for integrated circuits. The demand in the memory market is expected to increase which could be the biggest driver in future revenue growth. This is likely to lift Capex spending on wafer equipment.

The company continued to prioritize investment in innovation and product differentiation, shifting a higher percentage of total operating expenses to research and development than in any prior quarter. The company continues to see healthy spending in the Foundry segment that is heavily focused on the 5 and 7-nanometer nodes. For the balance of the calendar year, Lam expects to see continued strength in the Foundry and Logic space.

Read: Nvidia rebounds on new promising growth area

Analysts expect the company’s earnings to drop by 10.40% to $3.01 per share and revenue will fall by 7.30% to $2.16 billion for the first quarter. The company has surprised investors by beating analysts’ expectations in all of the past four quarters. The majority of the analysts recommended a “buy” rating with an average price target of $233.10.

For the fourth quarter, Lam Research reported a 47% dip in earnings due to lower revenues. For the first quarter, the management expects revenues in the range of $2 billion to $2.3 billion and adjusted earnings in the range of $2.80 to $3.20 per share. Unadjusted earnings are anticipated to be in the range of $2.71 to $3.11 per share for the first quarter.

Get access to timely and accurate verbatim transcripts that are published within hours of the event.

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

One thought on “Lam Research (LRCX) likely to post weak Q1 2020 earnings

Leave a Reply

Your email address will not be published. Required fields are marked *

Add Comment
Loading...

Cancel
Viewing Highlight
Loading...
Highlight
Close
Top