Lam Research stock plummets after supply-chain issues lead to disappointing sales and earnings forecast

Revenue rose to $4.23 billion from $3.46 billion in the year-ago quarter, but came in lower than analysts’ consensus estimate amid a global semiconductor shortage. Analysts surveyed by FactSet had forecast adjusted earnings of $8.52 a share on revenue of $4.41 billion, based on Lam’s forecast of $7.95 to $8.95 a share on revenue of $4.15 billion to $4.65 billion.

“While supply-chain conditions worsened in late December and are causing near-term impacts to our results, we expect wafer fabrication equipment investments to again increase in calendar-year 2022, leading to another strong growth year for Lam,” Chief Executive Tim Archer said in a statement.

Shares dove more than 10% in after-hours trading immediately following the release of the results, following a 1.4% gain in the regular session to close at $596.67.  

Read: Chips may be sold out for 2022 thanks to shortage, but investors are worried about the end of the party

Lam forecast fiscal third-quarter adjusted earnings of $6.70 to $8.20 a share on sales of $3.95 billion to $4.55 billion. Analysts on average were projecting earnings of $8.72 a share on revenue of $4.49 billion heading into the report, according to FactSet.

Smaller rival KLA Corp. KLAC, +2.83% is scheduled to report its quarterly earnings after the close of markets Thursday.

Lam shares have gained 10% over the past 12 months, compared with a 15% rise in the PHLX Semiconductor Index SOX, +1.68%, a 15% gain by the S&P 500 index  SPX, -0.15%, and a 2% advance in the tech-heavy Nasdaq Composite Index COMP, +0.02%.