Chip Bellwether ASML Beats Estimates for Sales Forecasts

(Bloomberg) -- Fourth-quarter sales and profit forecasts at ASML Holding NV, Europe’s largest semiconductor equipment maker, beat analyst expectations as the chip industry bellwether announced five new orders for its newest lithography machines in the third quarter.

ASML shares rose as much as 6.3 percent in Amsterdam Wednesday. The stock has gained 12.8 percent this year, valuing the manufacturer at 70.6 billion euros.

Key Insights

  • The Veldhoven, Netherlands-based company predicts sales of 3 billion euros ($3.47 billion) for the fourth-quarter, compared with an average analyst estimate of 2.9 billion euros.
  • Baader analyst Guenther Hollfelder says continuing strong demand for products into 2019 is “positive news against the backdrop of the negative sentiment for the sector.”
  • The fourth-quarter sales forecast "gets us for the full-year to approximately 11 billion euros, which again is a record year for ASML," Chief Financial Officer Roger Dassen said in a video statement. "We once again show healthy growth for 2018, both at the sales level and at the gross margin and profit level."
Chip Bellwether ASML Beats Estimates for Sales Forecasts

Know More

  • "We’re progressing well with EUV, many of our customers have announced that they’re going for high-volume manufacturing on EUV starting in 2019," Dassen said.
  • ASML locked in five new orders in the third quarter for its newest machines, called extreme ultraviolet lithography systems, which the gear-maker has been pushing to clients including Intel Corp. and Samsung Electronics Co. The machines cost more than 100 million euros each.
  • Forecasts a gross margin of about 48 percent in the final quarter of the year, beating the average estimate for 45.3 percent. Third-quarter sales came in at 2.78 billion euros, just beating the average analyst estimate of 2.75 billion euros.
  • Dassen said the company predicts "another healthy intake of orders in the fourth quarter" for EUV as it plans around 30 shipments for 2019.
  • For 2019, Dassen said the company expects strength in its logic and memory chip segments and "significant growth" in installed base revenue because the company sees plans by its clients to update their systems.

©2018 Bloomberg L.P.