ASML orders miss estimates as CFO says it's still on track to meet 2025 goal

By Steve Goldstein

ASML Holding, the Dutch microchip equipment maker whose machines are so high tech that the U.S. limits what it can sell to China, on Wednesday reported worse-than-expected orders and a sharp drop in profit as the company works through what it calls a transition year.

ASML (ASML) said first-quarter earnings fell to EUR1.22 billion, or EUR3.11 a share, from EUR1.96 billion, or EUR4.95 a share, as revenue fell to EUR5.29 billion from EUR6.75 billion.

Analysts estimated a profit of EUR2.83 a share on sales of EUR5.42 billion, according to Visible Alpha.

It sold 70 of its units during the quarter, down from 100 last year and 124 in the fourth quarter.

ASML, a constituent of the Nasdaq 100, reported orders of EUR3.61 billion, from EUR3.75 billion in the year-earlier quarter and well below analyst estimates of EUR5.1 billion.

ASML shares (NL:ASML) skidded 4% in Amsterdam.

"I think it's important to recognize that the order intake over the past six months, so if you take the Q4 and the Q1 order intake together, you're looking at nearly EUR13 billion, which is a pretty significant number," said CFO Roger Dassen in an interview released by the company.

He said order intake process was "lumpy" but in order to hit the midpoint of its 2025 guidance for EUR35 billion of sales, it would need to see orders of over EUR4 billion each of the next three quarters to be fully booked.

JPMorgan analyst Sandeep Deshpande agreed that the 2025 guidance was still achievable, noting that Taiwan Semiconductor Manufacturing (TSM) didn't make any significant orders during the first quarter. "Don't sweat it," added Bank of America analysts led by Didier Scemama.

ASML is forecasting second-quarter total net sales between EUR5.7 billion and EUR6.2 billion - shy of the EUR6.47 billion expected by analysts - with a gross margin between 50% and 51%.

Dassen said next year the company will benefit both from a cyclical improvement in the industry as well as secular trends like AI. "The secular trends are really strong, if you look at AI, if you look at electrification, if you look at the energy transition. It's all very strong, very positive momentum behind it," he said.

Related: Chip makers are in an arms race and ASML is the arms dealer, hedge fund manager says.

-Steve Goldstein

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04-17-24 0938ET

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