Market Overview

Lam Research's Earnings: A Preview

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Lam Research (NASDAQ:LRCX) announces its next round of earnings this Wednesday, January 27. Here is Benzinga's everything-that-matters guide for this Wednesday's Q2 earnings announcement.

Net Income, Earnings, And Earnings Per Share

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Analysts expect Lam Research earnings of $5.72 per share. Revenue will likely be around $3.34 billion, according to the consensus estimate. Lam Research reported a per-share profit of $4.01 when it published results during the same quarter last year. Sales in that period totaled $2.58 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to match the consensus estimate when it reports Wednesday, EPS would be up 42.64%. Sales would be up 29.26% from the year-ago period. Lam Research's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q1 2020 Q4 2020 Q3 2020 Q2 2020
EPS Estimate 5.19 4.04 3.98 3.84
EPS Actual 5.67 4.78 3.98 4.01
Revenue Estimate 3.11 B 2.68 B 2.58 B 2.51 B
Revenue Actual 3.18 B 2.79 B 2.50 B 2.58 B

Stock Performance

Shares of Lam Research were trading at $567.76 as of January 25. Over the last 52-week period, shares are up 88.92%. Given that these returns are generally positive, long-term shareholders are probably satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Lam Research is scheduled to hold the call at 17:00:00 ET and can be accessed here.

 

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Posted-In: BZI-EPEarnings