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The heavyweight from the leading Eurozone index, EuroSTOXX 50, has lowered its annual forecast despite recording new orders at a record high. The reason given by management is to postpone sales postings to the coming year.
Instead of a sales increase of around a fifth, ASML expects an increase of around ten percent this year, the group announced Wednesday in Veldhoven, the Netherlands. Responsible for this are supply bottlenecks that force management to accelerate the delivery process. Thanks to these so-called “quick deliveries”, the group delivers its machines, but final commissioning takes place only later at the customer’s factory. This also shifts the posting of sales to the rear. According to ASML, sales of EUR 2.8 billion will thus be postponed to the coming year. That’s about 1.8 billion more than previously thought.
On top of that, there would be financial burdens due to inflation and investment in one’s own abilities. Against this backdrop, management expects a gross margin of 49 to 50 percent in 2022, slightly less than analysts expected. Even so, management was optimistic about the numbers. “Some customers are showing signs of falling demand, especially in consumer-driven markets,” CEO Peter Wennink said in a statement. “Driven by global megatrends in the automotive industry, high-performance computing and the energy transition, we continue to see a great demand for our systems.”
Experts at Bernstein Research also see opportunities in newer extreme ultraviolet (EUV) lithography to produce state-of-the-art electronic chips. Here they are very optimistic about demand as chip companies plan and order strategically here. On the other hand, they were more cautious about older systems, the so-called DUV (deep ultraviolet) systems, indicating a lower demand for memory chips and a highly advanced cycle of demand in the area of logic circuits. Although DUV systems are not state-of-the-art, they are standard in the production of low-end electronic chips for cars, smartphones, computers, and many robots.
Investors in the stock market were not very enthusiastic, although the stocks had high initial losses. It recently fell by almost one percent to EUR 480.10. In the morning it fell to EUR 461.50. The recovery course of the last few days is thus put to the test. This year is now minus almost a third.
In the third quarter, ASML expects revenues of 5.1 to 5.4 billion euros and gross margins of 49 to 50 percent. Both indicators are significantly below analysts’ expectations.
In the second quarter that has just ended, the group increased sales by a good third to EUR 5.4 billion year-on-year. The group thus exceeded the analysts’ expectations. Gross margin at 49.1 percent. it was slightly lower than experts had predicted. Orders received in the months from April to June amounted to almost EUR 8.5 billion and thus achieved the highest value of the company in the quarter so far.
The result is that a profit of EUR 1.4 billion was much better than a year ago. In addition, the management board intends to pay a quarterly dividend in the future. The first dividend in advance of EUR 1.37 per share will be paid to shareholders in August.
Goldman leaves ASML on the ‘Conviction Buy List’ with a target of € 940
US investment bank Goldman Sachs placed ASML on its “condemnation shopping list” with a target price of € 940 after quarterly data and a downgraded sales forecast. Chip industry hardware vendor stocks should initially react cautiously to the lowered target for sales growth, analyst Alexander Duval wrote on Wednesday. However, ASML is likely to catch up with lower growth in the coming year. In addition, the company positively commented on the development of orders and was positively surprised in the second quarter with sales and operating result (EBIT).
ASML shares on EURONEXT in Amsterdam rose by 3.38 percent to EUR 501.20.
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Original study published: 07/20/2022 / 07:17 / BST Initial distribution of original study: date undefined in study / indefinite time in study / time zone undefined in study
NEW YORK / VELDHOVEN (dpa-AFX)
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