Looking back on semiconductor manufacturing stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Lam Research (NASDAQ: LRCX) and its peers.
The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers, and data storage. The need for technologies like artificial intelligence, 5G networks, and smart cars is also creating the next wave of growth for the industry. Keeping up with this dynamism requires new tools that can design, fabricate, and test chips at ever smaller sizes and more complex architectures, creating a dire need for semiconductor capital manufacturing equipment.
The 14 semiconductor manufacturing stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.3% while next quarter’s revenue guidance was 0.5% below.
Luckily, semiconductor manufacturing stocks have performed well with share prices up 28.9% on average since the latest earnings results.
Lam Research (NASDAQ: LRCX)
Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ: LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.
Lam Research reported revenues of $5.32 billion, up 27.7% year on year. This print exceeded analysts’ expectations by 1.6%. Overall, it was a very strong quarter for the company with revenue guidance for next quarter exceeding analysts’ expectations and a significant improvement in its inventory levels.
"Lam's innovations are helping our customers address major AI-driven semiconductor manufacturing inflections," said Tim Archer, Lam Research's President and Chief Executive Officer.
Interestingly, the stock is up 55% since reporting and currently trades at $218.78.
Best Q3: Teradyne (NASDAQ: TER)
Sporting most major chip manufacturers as its customers, Teradyne (NASDAQ: TER) is a US-based supplier of automated test equipment for semiconductors as well as other technologies and devices.
Teradyne reported revenues of $769.2 million, up 4.3% year on year, outperforming analysts’ expectations by 3.3%. The business had a stunning quarter with a solid beat of analysts’ adjusted operating income estimates and revenue guidance for next quarter exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 51% since reporting. It currently trades at $217.95.
Is now the time to buy Teradyne? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Entegris (NASDAQ: ENTG)
With fabs representing the company’s largest customer type, Entegris (NASDAQ: ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.
Entegris reported revenues of $807.1 million, flat year on year, exceeding analysts’ expectations by 0.6%. Still, it was a slower quarter as it posted revenue guidance for next quarter missing analysts’ expectations significantly and EPS in line with analysts’ estimates.
Interestingly, the stock is up 10.3% since the results and currently trades at $104.31.
Read our full analysis of Entegris’s results here.
KLA Corporation (NASDAQ: KLAC)
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ: KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
KLA Corporation reported revenues of $3.21 billion, up 13% year on year. This number topped analysts’ expectations by 1.1%. It was a strong quarter as it also produced a decent beat of analysts’ adjusted operating income estimates and a beat of analysts’ EPS estimates.
The stock is up 13.2% since reporting and currently trades at $1,399.
Read our full, actionable report on KLA Corporation here, it’s free.
IPG Photonics (NASDAQ: IPGP)
Both a designer and manufacturer of its products, IPG Photonics (NASDAQ: IPGP) is a provider of high-performance fiber lasers used for cutting, welding, and processing raw materials.
IPG Photonics reported revenues of $250.8 million, up 7.6% year on year. This result beat analysts’ expectations by 5%. Overall, it was a very strong quarter as it also put up a beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
The stock is down 10.3% since reporting and currently trades at $77.08.
Read our full, actionable report on IPG Photonics here, it’s free.
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