Lam Research Corporation
) reported second quarter fiscal 2014 non-GAAP earnings of $1.10
per share, beating the Zacks Consensus Estimate by 7 cents.
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Revenues of $1.12 billion increased 10.0% sequentially and 29.6%
year over year. Revenues also beat the Zacks Consensus Estimate
of $1.10 billion. The year-over-year improvement was primarily
driven by continued strength in the foundry segment.
Revenues by Geography
Region-wise, North America contributed 13% of fiscal second
quarter 2014 revenues (14% in the last quarter). Europe's share
was 5% (9% in the prior quarter) while Japan brought in 17% (13%
in the last quarter) of the revenues. Asia-Pacific accounted for
25% of the revenues (17% in the prior quarter), Korea added 19%
(23% in last quarter) while Taiwan contributed the remaining 28%
(24% in the previous quarter).
Shipments were roughly $1.14 billion during the quarter, up 15.0%
from $987.0 million in the prior quarter. Foundries accounted for
28% of total shipments, NAND 36%, DRAM 28.0%, with Logic and
Others bringing in the balance.
Geographically, North America accounted for 9% of fiscal second
quarter 2014 shipments (17% in the first quarter of 2014). Europe
generated 7% (8% in the prior quarter), Japan brought in 13% (17%
in the prior quarter),and Korea contributed 24% (18% in the
previous quarter). Asia Pacific was the largest contributor with
25% (19% in the previous quarter) of total shipments while Taiwan
accounted for 22% (21% in the prior quarter).
Non-GAAP gross profit was $510.8 million, or 45.8% of revenue,
compared with non-GAAP gross profit of $456.7 million, or 45.0%
of revenue in the prior quarter. Higher revenues coupled with
favorable customer mix were the main reasons for the margin
Total operating expenses were $302.1 million, up from $291.9
million in the prior quarter. Operating margin was 18.7%, up 250
bps from 16.2% recorded in the prior quarter.
Non-GAAP net income was $188.7 million compared with income of
$139.1 million in the prior quarter and $77.2 million in the
Exiting fiscal second quarter 2014, cash and cash equivalents,
short-term investments, and restricted cash and investment
balances was $2.7 billion compared with $2.6 billion in the prior
quarter. This increase was primarily the result of approximately
$129 million in cash flow from operating activities during the
reported quarter, partially offset by $48 million of stock
Deferred revenue and deferred profit balances increased to $405.0
million and $224.4 million, respectively, compared with $334.0
million and $188.4 million, respectively, in the prior quarter.
Long term debt, convertible notes, and capital leases amounted to
$803.3 million compared with $796.4 million in the prior quarter.
For the third quarter of fiscal 2014, Lam Research expects
revenues to be in the range of $1.215 billion-$1.245 billion.
Shipments are expected to be roughly in the range of $1.25
billion-$1.28 billion. Gross margin is expected to be
approximately 45% (+/-1%) while operating margin is expected to
be around 19.5% (+/-1%). Earnings per share are projected to be
$1.15 (+/- 5 cents) on a share count of $173.0 million.
Lam Research delivered decent fiscal second quarter 2014 results
with the top and bottom lines beating the Zacks Consensus
Estimate. However, foundries are not the only segment witnessing
growth. Lam's memory business was also very strong in the
quarter. Further, the company provided strong third quarter
guidance, reflecting modest improvement in semiconductor
Lam Research continues to invest in next-generation products and
technologies to combat the fierce competition, which we believe
will boost growth and profitability going forward.
Further, Lam Research is witnessing strength in the advanced
packaging segment on the back of several design wins in advanced
wafer-level packaging applications.
Lam Research currently has a Zacks Rank #3 (Hold). Lam Research
is well-positioned in the semiconductor equipment segment and its
closest peers are
), Tokyo Electron and
ASML Holding NV