December 19, 2008, 11:30 am
Lam Research Cuts Q4 Guidance
Posted by Eric Savitz
Citing the weak market for semiconductor manufacturing equipment, Lam Research (LRCX) this morning cut its guidance for Q4.
The company now sees revenue of $270 million to $285 million, down from $285 million to $315 million. Shipments are expects to be $212 million to $225 million, down from $250 million to $270 million. The company expects operating margin to range from -10% to -12%; old guidance was a range of -8% to positive 1%.
In an 8-K filing on November 20, the company announced a restructuring program, including the elimination of 600 jobs, or about 15% of its workforce. The restructuring will reduce expenses by $15 million to $20 million a quarter. Related charges will be $20 million to $26 million, including $15 million to $20 million in cash charges related to termination benefits.
In a statement, CEO Steve Newberry said that “business conditions in the semiconductor equipment sector have deteriorated further in recent weeks,” noting that weak memory pricing, softening end-user demand and tight credit markets have lead to dramatic reductions in customer purchases.
Newberry said that current conditions “will persist going into 2009.”
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