Lam misses estimates despite stellar sales

Lam (Fremont, Calif.) said revenue for the period was $437.4 million, and net income was $86.3 million, or $0.60 per diluted share.

The company missed its projections. “Our model calls for $0.63 on $430 million in March vs. consensus of $0.62 on $424 million,” said Avinash Kant, an analyst with Canaccord Adams Inc. (Boston).

In the previous quarter, Lam posted revenue of $358.2 million, and net income of $77.8 million, or $0.55 per diluted share. It posted sales of $349.3 million and net income of $59.5 million, or $0.41 a share, in the like period a year ago.

Gross margin as a percent of revenue for the March 2006 quarter was 50.2 percent compared to 49.5 percent in the December 2005 quarter. New orders recorded in backlog increased 29 percent sequentially to $520 million.

"Market share gains and solid execution drove strong results for the March quarter," stated Steve Newberry, president and chief executive of Lam, in a statement. "Recently, at our analyst and investors event, we announced our entrance into the clean and strip market segments and believe these areas will provide additional opportunities for growth in the future.”

In a conference call, the Lam CEO was upbeat about the current quarter. He projected that Lam would earn $0.80-to-$0.85 a share on sales of $490-to-$510 million in the current quarter. Orders are expected to jump 5-to-15 percent over the previous quarter.

However, the company is accelerating its spare-part reduction program in the marketplace, which will reduce its overall gross margins.