Updated from 4:40 p.m. EDTSAN FRANCISCO -- Lam Research ( LRCX) posted healthy sales growth in its fiscal first quarter, beating Wall Street expectations. But the chipmaking equipment company was mum about its bottom line, owing to a continuing investigation into past stock options. Revenue in the three months ended Sept. 23 totaled $684.6 million, up 13% year over year, and ahead of the $675.8 million expected by analysts. The company credited the growth to market-share gains. "We have enjoyed significant success in enhancing our market position at the leading edge, winning a number of new applications and executing to our customers' most critical challenges," said CEO Steve Newberry in a statement. Analysts were looking for Lam to earn $1.27 in EPS, although Lam didn't provide a figure because of its previously announced internal accounting probe involving stock option grants. The company provided a preliminary operating income of $197.9 million, up about 1.6% from this time last year. Lam also said its gross margin was 50.2% vs. 51.8% at this time a year ago. Shares of Lam were up 32 cents in recent after-hours trading to $55.33. Lam is the first chip equipment maker to provide financial results for the recently ended quarter, and its results come on the heels of a spate of negative news for the chip equipment industry.
Earlier Wednesday, Lehman Brothers downgraded a trio of chip equipment companies -- Applied Materials ( AMAT), KLA-Tencor ( KLAC) and Novellus Systems ( NVLS) -- citing excessive spending on memory chips and the potential for a slowdown in worldwide economic growth. Last week, industry research firm Gartner lowered its outlook for semiconductor capital equipment spending in 2008, forecasting flat growth for the year. In a post-earnings conference call, Lam's Newberry said the company expected spending on DRAM memory equipment to begin a downward trend. But he noted that spending on NAND flash memory equipment, as well as on the tools for manufacturing logic chips and microprocessor were poised to rise in the first half of the 2008 calendar year. All told, Newberry said, industrywide spending on silicon wafer fabrication equipment should be flat in 2008. For the current quarter, Newberry said the company expects shipments to decline 5% to 10%, with revenue between $580 million and $600 million. That's below the average analyst expectation of $613.5 million, according to Thomson Financial. Lam said the outlook is consistent with its previous guidance for the full calendar year, which called for revenue to increase between 15% and 20% year-over-year.