Summary
Lam Research Corporation (LRCX) reported revenue of $2.44 billion for the third quarter of fiscal year 2019, a decrease of 16% year-over-year, and an 8% decrease for the first nine months of the fiscal year. This decline is attributed to lower customer demand for semiconductor equipment, particularly in the memory market which saw a significant drop in its contribution to system revenues. Despite the revenue dip, the company maintained a solid gross margin of 44.0%. Net income for the quarter was $547.4 million, resulting in diluted earnings per share of $3.47, down from $4.33 in the prior year's comparable quarter. The company continues to invest heavily in research and development, with R&D expenses increasing both year-over-year and sequentially, indicating a focus on innovation amidst industry fluctuations. Financially, Lam Research strengthened its balance sheet by issuing $2.5 billion in senior notes. This move, combined with strong operating cash flow, allowed the company to fund substantial treasury stock repurchases ($2.7 billion in the nine-month period) and dividend payments ($513.5 million). Total cash and investments increased to $6.4 billion. The company remains committed to its capital return program, though future dividend payments and share repurchases are subject to board approval and market conditions.
Financial Highlights
56 data points| Revenue | $2.44B |
| Cost of Revenue | $1.36B |
| Gross Profit | $1.07B |
| R&D Expenses | $318.51M |
| SG&A Expenses | $190.31M |
| Operating Expenses | $508.82M |
| Operating Income | $565.52M |
| Interest Expense | $30.26M |
| Net Income | $547.39M |
| EPS (Basic) | $0.36 |
| EPS (Diluted) | $0.35 |
| Shares Outstanding (Basic) | 1.51B |
| Shares Outstanding (Diluted) | 1.58B |
Key Highlights
- 1Revenue for the third quarter of fiscal year 2019 was $2.44 billion, a 16% decrease compared to the same period in the prior year, driven by reduced demand for semiconductor equipment.
- 2Net income for the quarter was $547.4 million, translating to diluted EPS of $3.47, down from $4.33 in the prior year's quarter.
- 3Gross margin remained strong at 44.0%, although down from 46.0% in the prior year's comparable quarter, primarily due to lower factory utilization and customer/product mix.
- 4Research and Development (R&D) expenses increased to $318.5 million (13.1% of revenue), reflecting continued investment in innovation.
- 5The company issued $2.5 billion in senior notes, bolstering its cash position to $6.4 billion in total cash and investments.
- 6Significant treasury stock repurchases were made, totaling $2.7 billion for the nine months ended March 31, 2019, alongside $513.5 million in dividends paid.
- 7The contribution of the memory market to system revenues decreased significantly, while foundry and logic/integrated device manufacturing showed relative strength.