Lam Research Corporation (NASDAQ:LRCX) stock rallies 7.85% (As on April 20, 11:43:20 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the third quarter of FY 23. For the March 2023 quarter, non-GAAP gross margin was $1,704 million, or 44.0% of revenue, non-GAAP operating expenses were $608 million, non-GAAP operating income was 28.3% of revenue, and non-GAAP net income was $946 million, or $6.99 per diluted share. This compares to non-GAAP gross margin of $2,382 million, or 45.1% of revenue, non-GAAP operating expenses of $686 million, non-GAAP operating income of 32.1% of revenue, and non-GAAP net income of $1,461 million, or $10.71 per diluted share, for the December 2022 quarter.

Further, Cash and cash equivalents, short-term investments, and restricted cash and investments balances increased to $5.6 billion at the end of the March 2023 quarter compared to $4.8 billion at the end of the December 2022 quarter. This increase was primarily the result of $1,726 million of cash generated from operating activities, partially offset by $582 million of share repurchases, including net share settlement of employee stock-based compensation; $234 million of dividends paid to stockholders; and $119 million of capital expenditures. Deferred revenue at the end of the March 2023 quarter increased to $2,003 million compared to $1,984 million as of the end of the December 2022 quarter. Lam’s deferred revenue balance does not include shipments to customers in Japan, to whom title does not transfer until customer acceptance. Shipments to customers in Japan are classified as inventory at cost until the time of acceptance. The estimated future revenue from shipments to customers in Japan was approximately $212 million as of March 26, 2023 and $379 million as of December 25, 2022.

LRCX in the third quarter of FY 23 has reported the adjusted earnings per share of $6.99, beating the analysts’ estimates for the adjusted earnings per share of $6.53, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue of $3.87 billion in the third quarter of FY 23, beating the analysts’ estimates for revenue by 1.23%.

Lam Research sees Q4 2023 EPS to be in the range of $4.25-$5.75 versus the analyst consensus of $5.63. Lam Research sees Q4 2023 revenue to be in the range of $2.80B-$3.40B versus the analyst consensus of $3.47B.