10-QPeriod: Q2 FY2010

LAM RESEARCH CORP Quarterly Report for Q2 Ended Dec 27, 2009

Filed February 5, 2010For Securities:LRCX

Summary

Lam Research Corporation (LRCX) reported a significant recovery in its financial performance for the quarter ending December 27, 2009, compared to the previous periods. Revenue increased by 53% sequentially to $487.2 million, driven by a rebound in demand for wafer fabrication equipment, supported by improving global economic conditions and a recovery in the semiconductor industry. This strong top-line growth translated into a substantial increase in profitability, with net income rising to $69.6 million, or $0.54 per diluted share, a significant improvement from the loss reported in the same quarter of the prior year. The company's gross margin also saw a healthy expansion, reaching 45.8% from 42.9% in the prior quarter, attributed to higher revenues, a better product mix, and improved factory absorption. While operating expenses increased due to the restoration of employee salaries and variable compensation, the overall profitability surged, reflecting a successful return to growth for Lam Research after a challenging period. The company ended the quarter with a strong cash position of approximately $831 million, indicating robust liquidity.

Financial Highlights

27 data points
Beta

Revenue

$487.18M

45.4% Gross Margin

Net Income

$69.57M

14.3% Net Margin

EPS (Diluted)

$0.05

Cash & Equivalents

$430.17M

Free Cash Flow

$73.31M

Financial Statements
Beta
Revenue$487.18M
Cost of Revenue$265.99M
Gross Profit$221.19M
R&D Expenses$82.17M
SG&A Expenses$60.11M
Operating Expenses$129.84M
Operating Income$91.35M
Net Income$69.57M
EPS (Basic)$0.06
EPS (Diluted)$0.05
Shares Outstanding (Basic)1.27B
Shares Outstanding (Diluted)1.29B

Key Highlights

  • 1Revenue surged by 53% sequentially to $487.2 million for the quarter ended December 27, 2009, signaling a strong recovery.
  • 2Net income rebounded to $69.6 million ($0.54 per diluted share) from a loss in the prior year period, indicating improved profitability.
  • 3Gross margin improved to 45.8% from 42.9% sequentially, driven by higher revenue, favorable product mix, and factory absorption.
  • 4The company experienced a significant increase in operating income to $91.3 million from a loss in the prior year.
  • 5Cash and investments totaled $830.6 million, demonstrating a strong liquidity position.
  • 6Shipments increased by 46% sequentially, driven by strong demand for etch and clean systems.
  • 7Investments in R&D remained substantial at 16.9% of revenue, highlighting continued focus on innovation despite economic recovery.

Frequently Asked Questions

The primary driver for the revenue increase was a significant rebound in demand for wafer fabrication equipment, supported by improving global economic conditions and a recovery in the semiconductor industry. Revenue grew 53% sequentially to $487.2 million.

Profitability saw a substantial improvement. The company reported a net income of $69.6 million ($0.54 per diluted share) for the quarter, a significant turnaround from a net loss of $24.2 million ($(0.19) per diluted share) in the same quarter of the prior year.

Lam Research maintained a strong liquidity position, with total cash, cash equivalents, short-term investments, and restricted cash and investments amounting to $830.6 million as of December 27, 2009.

The company anticipates above-market growth in customer shipments for calendar year 2010, expecting the total market for wafer-fabrication equipment to increase substantially over 2009. They believe recent strength in customer demand will continue at least through the first half of 2010, though they remain cautious about the macroeconomic recovery's pace and robustness.