Shares of ASML fell on Wednesday as the corporate missed revenue forecasts but maintained its full-year outlook.
ASML shares fell around 4.5% in early European trading following the outcomes.
Here’s how ASML in comparison with LSEG’s consensus estimates:
- Net sales: 5.29 billion euros (5.62 billion US dollars) in comparison with 5.39 billion euros expected.
- net profit: 1.22 billion euros in comparison with 1.07 billion euros expected.
Net sales fell 21.6% year-over-year, while net profit fell 37.4%. ASML’s net sales fell in the course of the corporate’s forecast.
Net orders for ASML machines, a closely watched booking, totaled 3.6 billion euros in the primary quarter, down 4% from a 12 months ago but down almost two-thirds from the December quarter.
ASML is one in every of the world’s preeminent semiconductor corporations, producing tools often called extreme ultraviolet lithography machines which might be required to supply the world’s most advanced chips.
Last 12 months, weak demand for consumer electronics similar to smartphones and laptops hit chipmakers that make semiconductors for these devices. This in turn has led to somewhat weaker demand for ASML equipment.
However, several semiconductor corporations across the board, similar to memory chip maker Samsung, are seeing a recovery in demand.
“ASML’s recent financial results were not what many investors had hoped or expected. After excellent orders in the fourth quarter, orders in the first quarter were expected to contract due to their lumpy nature, but the extent to which they fell was worse than expected and could potentially be even worse.” “An early warning sign of concern,” Ben Barringer, technology analyst at Quilter Cheviot, said in a note Wednesday.
“There are a number of factors at play: the economic environment is still extremely uncertain and customers are therefore no longer ordering in the same quantities as before. There will be a product change in 2025, so some may just hold off and keep some.” It’s still early in the year, and after all, sales in China are good, but it’s hard to predict what will happen in the future.
ASML had previously said it expects 2024 net sales to be similar to 2023 and reiterated that forecast on Monday. ASML reported net sales of 27.6 billion euros in 2023.
outlook
“Our full-year 2024 outlook remains unchanged, with the second half of the year expected to be stronger than the first, in line with the industry’s ongoing recovery from the downturn,” ASML CEO Peter Wennink said in a press release.
“We see 2024 as a year of transition with continued investments in both capacity expansion and technology to be prepared for the cycle change.”
ASML’s equipment is purchased by the world’s largest chipmakers similar to Taiwan Semiconductor Manufacturing Co., Samsung and Intel.
Part of ASML’s optimism comes from the undeniable fact that Samsung, TSMC and Intel are increasing their manufacturing capability in America with the support of US CHIPS and Science Act funding.
“I think by 2025 all three factors will come together: new factories opening, strong long-term trends and the industry is in the midst of recovery,” ASML Chief Financial Officer Roger Dassen said in a pre-recorded video interview.
ASML still needs to deal with any impact of export restrictions to China in the primary quarter.
In June last 12 months, under pressure from the United States, the Dutch government introduced restrictions on the export of advanced semiconductor equipment – including ASML’s machines.
However, the corporate said in a document released alongside its results that sales of its systems to China accounted for 49% of total revenue in the primary quarter, up from 39% within the fourth quarter of 2023.
ASML had previously said export restrictions would impact 10% to fifteen% of China sales this 12 months.
