LRCX - Weak demand memory markets downturn expected to weigh on Lam Research's FQ3 results

2023-04-18 13:07:18 ET

Lam Research ( NASDAQ: LRCX ) is scheduled to announce FQ3 earnings results on Wednesday, April 19th, after market close.

The consensus EPS Estimate is $6.53 (-11.8% Y/Y) and the consensus Revenue Estimate is $3.85B (-5.2% Y/Y).

Over the last 2 years, LRCX has beaten EPS estimates 88% of the time and has beaten revenue estimates 63% of the time.

Over the last 3 months, EPS estimates have seen 0 upward revisions and 17 downward. Revenue estimates have seen 0 upward revisions and 14 downward.

The maker and supplier of chip equipment has seen several downward revisions to its estimates amid weaker demand for its wafer fabrication products and reliance on memory companies at a time when spending on DRAM and NAND has been falling.

LRCX in late January reported FQ2 profit and revenue that beat expectations. However, the company also announced a workforce reduction of about 1,300 employees.

LRCX CEO Tim Archer on the earnings call in January said that the company expected a "substantially weaker demand environment" in 2023.

"Customers across all segments are exercising caution, especially those in the memory markets. Inventory levels in both NAND and DRAM remain very high, and customers are not only reducing new capacity additions, but also lowering fab utilization levels to bring excess inventory into balance as quickly as possible," Archer had said.

Robert Castellano, investing group leader of Semiconductor Deep Dive, in an earnings preview said that he expected weak results from LRCX, citing uncertainty on the macro and geopolitical level and the significant downturn in memory equipment.

Castellano highlighted that LRCX's market share of the wafer fabrication equipment market decreased 9.9%% in 2022, underperforming the global 8.9% increase.

Lam Research ( LRCX ) stock has added 17.2% YTD.

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