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Earnings Results: Record earnings and sales aren’t enough for Lam Research as stock falls

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Lam Research Corp. is continuing to post record profit and sales during a global semiconductor shortage, but that wasn’t enough for investors Wednesday.

Lam
LRCX,
-0.93%

shares dove more than 4% in after-hours trading, after the semiconductor-equipment manufacturer revealed its biggest quarterly earnings and sales in history and predicted much of the same in the current quarter.

Lam revealed fiscal first-quarter profit of $1.18 billion, or $8.27 a share, on sales of $4.3 billion, up from $3.18 billion a year ago. After adjusting for amortization and other effects, the company reported earnings of $8.36 a share, up from $5.67 a share a year ago. Analysts on average expected adjusted earnings of $8.23 a share on sales of $4.32 billion, according to FactSet.

Lam has posted more than $1 billion in quarterly profit for three periods running, capped by the record amount in the fiscal first quarter, amid a chip crunch that has companies frantically trying to increase production capacity to meet demand.

“Driven by strong demand and solid execution, Lam delivered its sixth consecutive quarter of record revenue and earnings per share,” Chief Executive Tim Archer noted in a statement.

For the fiscal second quarter, executives predicted more to come: Their forecast calls for adjusted earnings of $7.95 to $8.95 a share on sales of $4.15 billion to $4.65 billion. Analysts on average were predicting adjusted earnings of $8.47 a share on sales of $4.41 billion, roughly in line with the midpoint of Lam’s guidance.

Still, shares pulled back after reaching record highs in recent weeks. After closing with a 0.9% decline at $565.50, the stock declined more than 4% in after-hours trading. Shares had increased 55.5% in the past year, but tumbled recently, falling 6.9% in the past three months; the S&P 500 index
SPX,
+0.37%

increased 31.3% and 4.6% in those periods.

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