Summary
Lam Research Corporation (LRCX) reported its financial results for the quarter ended September 25, 2005. The company, a provider of wafer fabrication equipment and services, experienced a sequential increase in new orders (3%), indicating a potential positive inflection point after a period of stabilization. However, revenue for the quarter decreased year-over-year, reflecting the prior decline in new orders. Gross margin remained a key focus, coming in at 48.6%, slightly above expectations, though it decreased compared to the prior year due to lower production volumes. The company continues to invest significantly in R&D, with R&D expenses increasing both sequentially and year-over-year, partly due to the adoption of SFAS No. 123R for stock-based compensation. Operating expenses (R&D and SG&A) are expected to remain around $100 million for the next quarter. Lam Research maintains a strong liquidity position, with $873.9 million in cash, cash equivalents, short-term investments, and restricted cash, and continues its aggressive share repurchase program.
Key Highlights
- 1New orders saw a sequential increase of 3% to $326 million, signaling a potential turnaround after a period of stabilization.
- 2The company expects new orders to grow between 5% and 10% sequentially in the December 2005 quarter.
- 3Revenue for the quarter was $320.9 million, down from $419.5 million in the prior year, reflecting the impact of prior order declines.
- 4Gross margin was 48.6%, exceeding expectations but down from 51.2% in the prior year, attributed to lower production volumes.
- 5R&D expenses increased to 16.0% of revenue, partly due to the adoption of SFAS No. 123R for stock-based compensation.
- 6The company repurchased $78.7 million of its common stock during the quarter and has $504.2 million available under its repurchase authorizations.
- 7Lam Research maintains a healthy liquidity position with $873.9 million in cash, cash equivalents, short-term investments, and restricted cash as of September 25, 2005.