Stock Trading in Red: Lam Research Corporation (NASDAQ: LRCX)

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Lam Research Corporation (NASDAQ: LRCX) stock fell over 3% on 22nd April, 2021 (as of 10:04:28 UTC-4 · USD; Source: Google finance) after the company posted lower than expected results for the third quarter of FY 21.

In Spares, the company has successfully closed with a key customer, which is the single largest annual contract in the company’s history, which includes commitments for critical leading-edge parts. In the quarter, the company has closed a multi-region data services license contract with a major memory manufacturer to provide enhanced tool data to enable their smart manufacturing roadmap. CSBG revenue eclipsed $1.3 billion in the March quarter, which is yet another record. The upgrades business is expected to roughly double over the two-year period ending in 2021. New material duration schemes enabled the company to win multiple 5-nanometer back end of line applications. And in the March quarter, the company had extended the wins to more advanced nodes as well.

LRCX in the third quarter of FY 21 has reported the adjusted earnings per share of $7.49, while reported the adjusted revenue growth of 11 percent to $3.85 billion in the third quarter of FY 21. The strong revenue performance was mainly due to an increase in Foundry related systems as well as solid performance in the customer support business group or CSBG, where we had increases in all parts of that business. Cash and short-term investments, including restricted cash declined slightly to $6 billion from $6.3 billion in the prior due to the capital return activity.

Moreover, the systems revenue saw continued strength in the memory segment, which represented 62% of systems revenue in the March quarter. The NAND segment was 48% of the systems revenue compared with 51% in the prior quarter, with customers investing in higher 3D device layer count and added capacity to address the overall broad demand for storage bits. In DRAM, the company had 14% of the March quarter systems revenue in this segment, compared to 17% in the prior quarter. The company expects to continue to see healthy and prudent levels of investment in the overall memory segment in calendar year 2021. The Foundry segment came in at 31% of the systems revenue compared to 26% in the quarter.

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