As semiconductor manufacturing stocks’ Q1 earnings season wraps, let's dig into this quarter’s best and worst performers, including KLA Corporation (NASDAQ:KLAC) and its peers.
The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers and data storage. The growth of data and technologies like artificial intelligence, 5G networks and smart cars are also creating a next wave of growth for the industry. To keep up with ever changing customer needs requires new tools that can design, fabricate and test at ever smaller sizes and more complex architectures, and that is driving the demand for semiconductor capital manufacturing equipment.
The 4 semiconductor manufacturing stocks we track reported a weak Q1; on average, revenues missed analyst consensus estimates by 0.16%, while on average next quarter revenue guidance was 1.75% under consensus. The whole tech sector has been facing a sell-off since late last year and while some of the semiconductor manufacturing stocks have fared somewhat better, they have not been spared, with share price declining 19% since earnings, on average.
Best Q1: 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 $2.28 billion, up 26.8% year on year, beating analyst expectations by 3.84%. It was a decent quarter for the company, with a beat on the bottom line but an increase in inventory levels.
"Our March quarter results demonstrate strong execution across multiple areas of our business, delivering revenue, GAAP and non-GAAP earnings per share all above the midpoint of the guidance ranges for the quarter," commented Rick Wallace, president and chief executive officer of KLA Corporation.
KLA Corporation pulled off the strongest analyst estimates beat of the whole group. The stock is down 10.9% since the results and currently trades at $296.51.
Is now the time to buy KLA Corporation? Access our full analysis of the earnings results here, it's free.
Marvell Technology (NASDAQ:MRVL)
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Marvell Technology reported revenues of $1.44 billion, up 73.8% year on year, beating analyst expectations by 1.46%. It was a mixed quarter for the company, with an exceptional revenue growth but an increase in inventory levels.
Marvell Technology scored the fastest revenue growth among its peers. The stock is down 25.1% since the results and currently trades at $42.62.
Is now the time to buy Marvell Technology? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Lam Research (NASDAQ:LRCX)
Founded in 1980 by David Lam, who pioneered semiconductor etching technology, Lam Research (NASDAQ:LCRX) is one of the leading providers of the wafer fabrication equipment used to make semiconductors.
Lam Research reported revenues of $4.06 billion, up 5.52% year on year, missing analyst expectations by 4.33%. It was a weak quarter for the company, with an underwhelming revenue guidance for the next quarter and a decline in operating margin.
Lam Research had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 18.1% since the results and currently trades at $395.
Applied Materials (NASDAQ:AMAT)
Founded in 1967 as the first company that built the tools for other companies to use to make semiconductors, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Applied Materials reported revenues of $6.24 billion, up 11.8% year on year, missing analyst expectations by 1.63%. It was a weak quarter for the company, with an underwhelming revenue guidance for the next quarter and a miss of the top line analyst estimates.
The stock is down 21.9% since the results and currently trades at $86.48.
The author has no position in any of the stocks mentioned