Wrapping up Q1 earnings, we look at the numbers and key takeaways for the semiconductor manufacturing stocks, 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 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 14 semiconductor manufacturing stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 3.16%, while on average next quarter revenue guidance was 1.49% under consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable, but semiconductor manufacturing stocks held their ground better than others, with the share prices up 17.7% since the previous earnings results, on average.
Lam Research (NASDAQ:LRCX)
Founded in 1980 by David Lam, who pioneered semiconductor etching technology, Lam Research (NASDAQ:LRCX) is one of the leading providers of the wafer fabrication equipment used to make semiconductors.
Lam Research reported revenues of $3.87 billion, down 4.7% year on year, in line with analyst expectations. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and an increase in inventory levels.
"Lam delivered solid March quarter performance, including record foundry-related revenues," said Tim Archer, Lam Research's President and Chief Executive Officer.
Lam Research delivered the weakest performance against analyst estimates of the whole group. The stock is up 24.9% since the results and currently trades at $613.4.
Read our full report on Lam Research here, it's free.
Best Q1: Photronics (NASDAQ:PLAB)
Sporting a global footprint of facilities, Photronics (NASDAQ:PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.
Photronics reported revenues of $229.3 million, up 12.1% year on year, beating analyst expectations by 8.68%. It was an exceptional quarter for the company, with a significant improvement in gross margin and revenue guidance for the next quarter above analysts' estimates.
Photronics scored the strongest analyst estimates beat among its peers. The stock is up 34.1% since the results and currently trades at $23.09.
Is now the time to buy Photronics? Access our full analysis of the earnings results here, it's free.
Weakest Q1: IPG Photonics (NASDAQ:IPGP)
Both a designer and manufacturer of most of its products, IPG Photonics (NASDAQ:IPGP) is a provider of high-performance fiber lasers that are used for cutting, welding and processing raw materials.
IPG Photonics reported revenues of $347.2 million, down 6.16% year on year, beating analyst expectations by 5.01%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and an increase in inventory levels.
The stock is down 4.57% since the results and currently trades at $112.63.
Read our full analysis of IPG Photonics's results here.
Semtech (NASDAQ:SMTC)
Operating for more than 60 years, Semtech (NASDAQ:SMTC) is a provider of analog and mixed-signal semiconductors used for Internet of Things systems and Cloud connectivity.
Semtech reported revenues of $236.5 million, up 17% year on year, in line with analyst expectations. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in operating margin.
The stock is down 0.26% since the results and currently trades at $22.38.
Read our full, actionable report on Semtech here, it's free.
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 $2.43 billion, up 6.29% year on year, beating analyst expectations by 2.36%. It was a mixed quarter for the company, with a beat on the bottom line but an increase in inventory levels.
The stock is up 30.2% since the results and currently trades at $465.5.
Read our full, actionable report on KLA Corporation here, it's free.
The author has no position in any of the stocks mentioned