Monday, January 30, 2023
HomeMarketASML Profit Tops Expectations. It Sees a Chip Market Rebound.

ASML Profit Tops Expectations. It Sees a Chip Market Rebound.

ASML’s lithography machines are key equipment to produce the most advanced semiconductors.

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Emmanuel Dunand/AFP via Getty Images

ASML
Holding, a critical supplier to the global chip-making industry, said Wednesday that it expects to report more than 25% sales growth this year despite uncertainty in the semiconductor industry, after it beat analysts’ expectations for its fourth-quarter profit. 

Dutch company
ASML
(ticker: ASML) supplies the ‘lithography’ machines that are essential for manufacturing semiconductors, with customers including
Taiwan Semiconductor
(TSM),
Samsung
(KRX) and
Intel
(INTC).

Some chip makers are now cutting back on spending in an industry downturn, with semiconductor maker
Texas Instruments
(TXN) saying on Tuesday that it was facing softening demand and higher cancellations for orders. 

“We continue to see uncertainty in the market caused by inflation, rising interest rates, risk of recession, and geopolitical developments related to export controls. However, our customers indicate that they expect the market to rebound in the second half of the year,” ASML CEO Peter Wennink. 

“Considering our order lead times and the strategic nature of lithography investments, demand for our systems therefore remains strong,” Wennink said. 

ASML’s net profit for the final quarter of 2022 was €1.8 billion ($1.96 billion), beating a consensus forecast of €1.71 billion, according to FactSet. Net sales for the quarter were €6.4 billion compared with €4.99 billion a year earlier, with a gross margin of 51.5%.

ASML said it expects first-quarter net sales between €6.1 billion and €6.5 billion. For 2023 overall it forecast a net sales increase of more than 25% and a slight improvement in gross margin relative to 2022. 

Analysts at UBS wrote in a research note that the guidance for sales growth was ahead of consensus expectations of around 21% for this year and that the results were “reassuring.”

American depositary receipts (ADRs) of ASML were down 0.8% in premarket trading, after a strong run up to the results that had sent the ADRs up 23% this year so far.

ASML said it would pay a total dividend of €5.80 per share for the year, up 5.5% from 2021.

Write to Adam Clark at adam.clark@barrons.com

Credit: marketwatch.com

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