Bullish stock to watch: Lam Research Corporation (NASDAQ: LRCX)

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Lam Research Corporation (NASDAQ: LRCX) stock rose over 3.8% on 30th January, 2020 (as of 11:13 am GMT-5; Source: Google finance) after the company posted better than expected results for the second quarter of FY 20. The company reported fiscal second-quarter net income of $514.5 million, compared with $568.9 million, in the year-ago period. The company’s cash and cash equivalents, short-term investments, and restricted cash and investments balances decreased to $4.9 billion at the end of the December 2019 quarter compared to $5.8 billion at the end of the September 2019 quarter. This decrease was mainly due to $1.0 billion of share repurchases, including net share settlement on employee stock-based compensation, $166.7 million of dividends paid to stockholders, and $62.1 million of capital expenditures, which was partially offset by $307.9 million of cash generated from operating activities.

LRCX in the second quarter of FY 20 has reported the adjusted earnings per share of $4.01, beating the analysts’ estimates for the adjusted earnings per share of $3.81, according to Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 35.9 percent to $2.58 billion in the second quarter of FY 20, beating the analysts’ estimates for revenue by 3.22%. For the December 2019 quarter, the company delivered the non-GAAP gross margin of $1,181 million or 45.7% of revenue, non-GAAP operating expenses were $481 million, non-GAAP operating income was 27.1% of revenue, and non-GAAP net income of $602 million. This is compared to non-GAAP gross margin of $983 million or 45.4% of revenue, non-GAAP operating expenses of $431 million, non-GAAP operating income of 25.5% of revenue, and non-GAAP net income of $480 million, or $3.18 per diluted share for the September 2019 quarter.

Moreover, deferred revenue and deferred profit at the end of the December 2019 quarter declined to $411 million and $366 million, respectively, as compared to $481 million and $407 million, respectively, at the end of the September 2019 quarter. The projected future revenue from shipments to customers in Japan was approximately $91 million as of December 29, 2019 and $47 million as of September 29, 2019.

Lam expects fiscal third-quarter earnings to be in the range of $4.15 to $4.95 a share on revenue expected to be in the range of $2.6 billion to $3 billion, while analysts had forecast $3.98 a share on revenue of $2.58 billion.

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