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Wednesday, October 11, 2006

Lam Research Leads Semiconductors Higher in After-Hours

Is Lam Research (LRCX) large enough to run the direction of the chip markets? We'll see. LRCX closed up 2.3% at $48.12 on the day after disclosing it would pay $175 million to Bullen for assets, but it is trading up over 5% at $50.75 in after-hours activity on its strong report.

The company posted $1.13 EPS and revenues of $604.4 million, well above the $1.03 and $594 million estimates. It even showed a GAAP earnings of $1.27 after items. It also showed a backlog of $725 million, up 13% sequentially. Gross margins was 51.8%, down from 52.2% in the previous quarter.

This is a semiconductor equipment maker, with a $6.8 Billion market cap. Applied Materials (AMAT) is trading up 1.5%, KLA-Tencor (KLAC) is trading up 1%, and Kulicke & Soffa (KLIC) is up 0.75% in after-hours trading after LRCX's report.

"September results reflect another quarter of strong revenue and earnings growth for Lam Research," stated Steve Newberry, Lam Research's president and chief executive officer. "Operating margins and income achieved record levels, and demonstrate the leverage throughout our business model. In addition, we generated record levels of cash from operations, a consequence of our focus on a disciplined approach to asset management. Clearly, these are excellent results and provide a solid foundation for future opportunities. Our customers continue to increase their reliance on Lam to deliver next-generation capability quickly and cost-effectively. Our market share continues to grow as we effectively support our rapidly growing installed base of leading edge equipment with well characterized solutions to our customers' most critical technical challenges," Newberry concluded.

Jon C. Ogg
October 11, 2006
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