Semiconductor equipment vendor ASML on Wednesday beat analyst estimates for the third quarter but disappointed with its sales outlook. ASML stock fell on the news.
The Netherlands-based company earned the equivalent of $5.23 a share on sales of $7.26 billion in the September quarter. ASML reports financial results in euros.
Analysts polled by FactSet had expected ASML earnings of $4.92 a share on sales of $7.19 billion. In the year-earlier period, ASML earned $4.20 a share on sales of $5.66 billion, FactSet said.
For the current quarter, ASML forecast sales of $7.28 billion, based on the midpoint of its guidance. Analysts were looking for $7.31 billion in sales for the fourth quarter. In the same quarter last year, ASML posted sales of $7.01 billion.
ASML Stock Falls After Report
On the stock market today, ASML stock dropped 4.2% to close at 583.25.
Chief Executive Peter Wennink predicted flat sales next year.
"The semiconductor industry is currently working through the bottom of the (chip) cycle and our customers expect the inflection point to be visible by the end of this year," he said in a news release. "Customers continue to be uncertain about the shape of the demand recovery in the industry. We therefore expect 2024 to be a transition year."
He added, "Based on our current perspective, we take a more conservative view and expect a revenue number similar to 2023. But we also look at 2024 as an important year to prepare for significant growth that we expect for 2025."
ASML On Tech Leaders List
Increased trade restrictions with China represent another headwind for ASML and other semiconductor firms.
Bernstein analyst Sara Russo reiterated her market perform, or neutral, rating on ASML stock.
The company's flat revenue guidance for 2024 is disappointing as consensus estimates called for mid-single-digit percentage growth, Russo said in a note to clients.
ASML stock ranks third out of 27 stocks in IBD's semiconductor equipment industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 98 out of 99.
The Dutch company makes advanced lithography equipment for etching tiny circuits onto semiconductors.
Further, ASML stock is on the IBD Tech Leaders list.
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