ASML shares experienced a decline on Wednesday as the company failed to meet sales forecasts but maintained its full-year outlook. In early European trading, ASML’s stock dropped approximately 4.5% following the release of the results.
Here’s how ASML’s performance compared to LSEG consensus estimates:
– Net sales: €5.29 billion ($5.62 billion) versus an expected €5.39 billion.
– Net profit: €1.22 billion versus an expected €1.07 billion.
Year-on-year, net sales fell by 21.6%, while net income declined by 37.4%. ASML’s net sales fell within the midpoint of the company’s guidance.
The net bookings for ASML’s machinery, a closely monitored metric, totaled €3.6 billion in the first quarter, marking a 4% decrease compared to the previous year and a significant drop of nearly two-thirds compared to the December quarter.
ASML is a prominent semiconductor company globally, known for producing extreme ultraviolet lithography machines crucial for manufacturing advanced chips.
Weak demand for consumer electronics in the previous year impacted chipmakers, affecting the demand for ASML’s equipment. However, there is a noticeable rebound in demand across various semiconductor firms, including memory chipmaker Samsung.
Ben Barringer, a technology analyst at Quilter Cheviot, expressed concerns about ASML’s latest financial results, citing a larger-than-expected decline in first-quarter orders.
He attributed this to various factors, including economic uncertainty, transition in product expected in 2025, and cautious spending by customers.
ASML reiterated its projection for net sales in 2024 to be similar to 2023, which totaled €27.6 billion. CEO Peter Wennink emphasized that the second half of 2024 is expected to be stronger than the first half, aligning with the industry’s recovery from the downturn.
ASML’s equipment is utilized by major chip manufacturers like Taiwan Semiconductor Manufacturing Co., Samsung, and Intel.
The company remains optimistic, especially with Samsung, TSMC, and Intel increasing production capacity in the U.S. with support from the U.S. CHIPS and Science Act.
ASML has yet to address any impact of export restrictions to China in the first quarter. Following U.S. pressure, the Dutch government implemented restrictions on the export of advanced semiconductor equipment, including ASML’s machinery.
Despite this, sales to China accounted for a significant portion of total sales in the first quarter, indicating resilience in the face of restrictions.
