Lam Research Q3 Earnings Beat: Can Strong Guidance Lift the Stock?

Lam Research LRCX reported third-quarter fiscal 2025 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.LRCX reported third-quarter fiscal 2025 non-GAAP earnings of $1.04 per share, which beat the Zacks Consensus Estimate by 4%. The bottom line increased 33.3% on a year-over-year basis, primarily driven by strong product demand, technology-driven upgrade cycles, and strategic execution across manufacturing and supply chain operations. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)In the third quarter of fiscal 2025, LRCX reported revenues of $4.72 billion, which surpassed the consensus mark by 1.64%. The top line increased 24.5% from the year-ago quarter’s $3.79 billion.Buoyed by better-than-expected fiscal third-quarter performance, Lam Research has released a strong outlook for the fourth quarter of fiscal 2025. LRCX shares have lost 28.2% in the past month due to a widespread sell-off in tech stocks, triggered by fears of rising trade tensions and slowing economic growth.However, the strong results of fiscal third quarter and upbeat guidance for the fiscal fourth quarter have pushed the stock up 4.4% in the pre-market trading hours of Thursday.Lam Research Corporation Price, Consensus and EPS Surprise Lam Research Corporation price-consensus-eps-surprise-chart | Lam Research Corporation QuoteLRCX’s Segment in DetailLam Research’s Systems revenues were $3.04 billion (64.3% of total revenues), up 15.6% from the previous quarter and 26.6% year over year. The reported figure missed the Zacks Consensus Estimate of $2.69 billion.In the Customer Support Business Group, revenues were $1.68 billion, comprising 35.7% of total revenues. This marks a 3.7% decrease from the previous quarter’s $1.75 billion, but a 20.5% increase from the year-ago period.LRCX’s Regions in DetailDuring the quarter, China contributed 31% of total revenues, Korea 24%, and Taiwan 24%. Other regions included Japan (10%), the United States (4%), Southeast Asia (4%), and Europe (3%).Operating Details of LRCXLam Research’s non-GAAP gross margin rose to 49.0%, up 150 basis points from 47.5% in the previous quarter.Non-GAAP operating expenses increased to $763 million, up 3.8% from $735 million. As a result, the non-GAAP operating margin improved to 32.8%, up 210 basis points from the prior quarter’s 30.7%.LRCX’s Balance Sheet & Cash FlowAs of March 30, 2025, Lam held $5.46 billion in cash and cash equivalents, down from $5.67 billion at the end of the prior quarter.Cash flow from operating activities increased significantly to $1.31 billion, up from $742 million in the previous quarter.During the quarter, Lam Research paid dividends totaling $295.7 million and repurchased shares worth $347 million.LRCX Provides Strong GuidanceFor the fourth quarter of fiscal 2025, Lam Research projects revenues of $5 billion (+/- $300 million). The Zacks Consensus Estimate for the fiscal fourth quarter is pegged at $4.54 billion, indicating year-over-year growth of 17.23%.The company expects a non-GAAP gross margin of 49.5% (+/-1%) and a non-GAAP operating margin of 33.5% (+/-1%).Non-GAAP earnings per share are projected to be $1.20 (+/- $0.10), with a diluted share count of 1.28 billion. The Zacks Consensus Estimate for the fiscal fourth quarter is pegged at 96 cents, indicating year-over-year growth of 18.5%.Zacks Rank and Other Stocks to ConsiderCurrently, LRCX carries a Zacks Rank #2 (Buy).ACM Research ACMR, Super Micro Computer SMCI and ACI Worldwide ACIW are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. ACIW, SMCI and ACMR sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.ACMR shares have lost 29.9% for the past year. The Zacks Consensus Estimate for ACMR’s full-year 2025 earnings is pegged at $2.15 per share, up by 35 cents over the past 60 days, suggesting a decline of 4.8% from the year-ago quarter’s reported figure.SMCI shares have plunged 56.4% in the past year. The Zacks Consensus Estimate for SMCI’s full-year fiscal 2025 earnings have been revised downward to $2.52 in the past seven days reflecting a year-over-year growth of 14%.ACIW shares have gained 55% over the past year. The Zacks Consensus Estimate for ACIW’s full-year 2025 earnings is pegged at $2.80 per share, up by 7 cents over the past 30 days, implying a rise of 6% from the year-ago quarter’s levels.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lam Research Corporation (LRCX): Free Stock Analysis Report ACM Research, Inc. (ACMR): Free Stock Analysis Report Super Micro Computer, Inc. (SMCI): Free Stock Analysis Report ACI Worldwide, Inc. (ACIW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks