Tech & AI
Lam Research falls after hours despite narrow earnings beat
Lam Research shares tumbled 7.4% after hours, even though the chip-equipment maker narrowly beat profit and revenue forecasts after a regular session in which the stock slid 1.0%.
Quick Read
- Lam Research shares tumbled 7.4% after hours even though quarterly profit and revenue narrowly beat analyst estimates.
- The stock had already slid 1.0% in regular trading while the Nasdaq-100 rose 1.1%.
- The chief executive credited demand tied to artificial intelligence for record revenue, profit and earnings per share in the September quarter.
- After-hours moves may shrink or reverse once regular trading opens on Thursday.
What happened to Lam Research shares?
Lam Research (Nasdaq: LRCX) shares tumbled 7.4% in after-hours trading on Wednesday, after the chip-equipment maker released its quarterly results. After-hours trading takes place after the regular session closes, with far fewer buyers and sellers.
Why it matters: The stock last traded at $241.48 in that late session. Earlier, in regular trading, the shares slid 1.0% and closed at $260.81. The company lost $3.3 billion of stock market value during the day.
By the numbers: The wider market moved the other way. The Nasdaq-100 rose 1.1%, and the technology sector fund gained 1.7%.
What did the company report?
Lam Research said earnings per share came in slightly above the analyst consensus. Earnings per share is profit divided by the number of shares. The consensus is the average forecast of the analysts who cover a company. Revenue also edged past expectations.
Chief executive Tim Archer said the company delivered record revenue, profit and earnings per share in the September quarter. He credited artificial intelligence for "driving higher semiconductor demand and greater device complexity."
The company also gave its forecast for the next quarter as ranges for profit and revenue. Analysts' average estimates sit inside both ranges.
Why did the stock fall after a beat?
The company and the reports did not give a single reason for the after-hours drop. Profit and revenue topped forecasts by only a little. Market reactions often depend on the size of the gap against forecasts, not only its direction.
The shares already sat 39.8% below their 52-week high of $433.33 at the regular close. Even so, $1,000 in the stock a year earlier had grown to $1,798 by that close.
What comes next?
What’s next: Regular trading resumes at 9:30 a.m. ET on Thursday, Oct. 22. After-hours moves often shrink or reverse once the full market opens, though they can also hold.
For markets more broadly, the next major scheduled event is the Federal Reserve's interest-rate decision on Oct. 28 at 2 p.m. ET.
For readers
What it could mean for you: Lam Research makes the equipment chipmakers use to build semiconductors, so its results can reach people who own a technology or semiconductor fund. Such funds concentrate on one industry, and a big swing in a large holding can move them more than a broad index fund. If the after-hours drop holds on Thursday, those funds could feel a drag, though other chip stocks may move differently. Lam's outlook may also shape how investors judge spending on chipmaking equipment.
Questions and answers
Why did Lam Research stock fall after earnings?
The company narrowly beat estimates for profit and revenue, but its shares tumbled 7.4% after hours. The reports gave no single reason, and a slim beat may fall short of what a share price already reflected.
Did Lam Research beat earnings estimates?
Yes. Earnings per share and revenue both came in slightly above the analyst consensus for its fiscal first quarter.
What is Lam Research's outlook for next quarter?
The company gave ranges for next-quarter profit and revenue. Analysts' average estimates sit inside both ranges.
Are after-hours stock moves final?
No. Fewer traders take part after hours, and prices may shift once regular trading opens at 9:30 a.m. ET.
The numbers
| Lam Research (LRCX) price | $260.81 |
|---|---|
| Lam Research (LRCX) change | −1.00% |
| Lam Research (LRCX) market value | $330 billion |
| Lam Research (LRCX) 52-week high | $433.33 |
| S&P 500 change | +0.58% |
| 10-year Treasury yield | 5.13% |
Wednesday’s close
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Not investment advice.
