Semiconductor equipment maker Lam Research Corp. (LRCX), Wednesday reported a sharply lower profit for the fourth quarter, as revenues and margins dropped significantly from last year. Nevertheless, revenues for the quarter came in ahead of Street estimates.
Fremont, California-headquartered Lam Research's net income for the quarter dropped to $33.2 million or $0.27 per share from $221.9 million or $1.78 per share in the year-ago quarter.
Adjusted net income for the quarter was $41.0 million or $0.34 per share. On average, 17 analysts polled by Thomson Reuters expected net income of $0.30 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter dropped to $584.0 million from $870.7 million in the year-ago quarter. Fifteen Street analysts on consensus expected revenues of $572.8 million for the quarter.
Gross margin for the quarter dropped to 40.2 percent from 46.8 percent in the year-ago quarter. Operating margin slipped to 8.1 percent from 27.7 percent last year.
Total operating expenses for the quarter increased to $187.3 million from $166.3 million in the prior-year quarter. Operating income for the quarter was $47.5 million compared with $241.1 million last year.
Compared to the preceding quarter, while the drop was not as precipitous, all metrics were still down. Shipments for the December 2011 quarter were $563 million compared to $580 million during the September 2011 quarter. The company attributed the sequential decrease in gross margin to lower factory and field utilization as a result of the decline in business volumes and product mix.
The bulk of the company's shipments are to Korea followed by North America and Taiwan.
Martin Anstice, who took over as Lam's president and chief executive officer on January 1, said, " Throughout 2011, we executed on our long-term growth strategy by investing in the technology and productivity solutions that address our customers' most critical needs and position Lam to solidify and grow its position in etch and single-wafer clean."
On December 14, Lam Research announced an agreement to acquire peer Novellus Systems Inc. (NVLS) for about $3.3 billion in stock, indicating the deal would create a vibrant semiconductor equipment company with good potential for revenues and earnings. Total cost synergies are expected to be approximately $100 million on an annualized basis by the fourth quarter of 2013.
LRCX closed Wednesday's regular trade at $43.55, up $0.20 or 0.46%, on the Nasdaq. In after-hours, the stock lost $1.05 or 2.41%. Over the past year, the stock traded in a range of $34.92 - $59.10.
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