Semiconductor equipment manufacturer Lam Research yesterday reported a near-doubling of fiscal Q3 profit, beating Street expectations. The gain is attributable mainly to demand for equipment used in the manufacture of DRAM memory and NAND flash chips. Lam posted earnings of $164.7 million ($1.15/share), up 91% from $86.3 million ($0.60/share) in the year-ago period. Revenue was up 49% to $650.3 million from $437.4 million a year ago. Analysts had forecast EPS of $1.06 on revenue of $644.2 million. Lam reported that in the quarter, 78% of its sales were to memory chip manufacturers, primarily in Korea, Japan and other Asian countries. Lam is forecasting fiscal Q4 revenue of $655-675 million and EPS in the $1.13-1.17 range, above Street expectations of $649 million and $1.08. Earlier in the week, Lam was upgraded by Citigroup and HSBC Securities. The company's shares closed up 0.9%, or $0.74, at $50.98.
Sources: Conference call transcripts: F3Q07 (Qtr End 3/25/07), MoneyCentral, MarketWatch, TheStreet.com, Reuters
Commentary: Semiconductor Pair Trade: Long Lam Research, Short Applied Materials • Semi Cap Equipment: Bad News Is Bad News, For A Change • JP Morgan Expecting Additional Upside In Semi Equipment Stocks
Stocks/ETFs to watch: Lam Research Corp. (LRCX). Competitors: Applied Materials Inc. (AMAT), Novellus Systems Inc. (NVLS). ETFs: Ultra MidCap400 ProShares (MVV), MidCap SPDRs (MDY)
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