ASML slides as Q1 sales fall short but firm still on track for 2025 revenue target

April 17, 2024 3:39 AM EDT
(Updated - April 17, 2024 5:40 AM EDT)

Shares of ASML Holdings (NASDAQ: ASML) dropped more than 4% in European trading Wednesday after the company reported worse-than-expected sales for the fiscal Q1 2024.

The chipmaker reported net sales of 5.29 billion euros, slightly below the anticipated 5.39 billion euros.

Net profit was reported at 1.22 billion euros, exceeding the forecasted 1.07 billion euros.

Compared to the previous year, net sales decreased by 21.6%, and net income saw a significant reduction of 37.4%.

Notably, net bookings for ASML’s equipment, a key indicator of future revenue, stood at 3.61 billion euros for the first quarter, marking a 4% decrease year-over-year and a substantial drop from the previous quarter, significantly missing the consensus estimate of 4.63 billion euros.

Despite the quarterly setbacks, ASML reaffirmed its annual guidance, expecting total sales to remain consistent with the previous year's 27.6 billion euros. The company is also preparing for a robust expansion in 2025.

“Our outlook for the full year 2024 is unchanged, with the second half of the year expected to be stronger than the first half, in line with the industry’s continued recovery from the downturn,” said Peter Wennink, CEO of ASML.

“We see 2024 as a transition year with continued investments in both capacity ramp and technology, to be ready for the turn in the cycle.”

ASML indicated that with its current backlog, it needs to secure approximately €4 billion in orders for each of the next three quarters to meet its €35 billion revenue target for the year.

"We do not expect any changes to CY24E EPS for css and keep confidence about ASML to deliver above that midpoint of €35bn in ‘25E. ASML would only need a BtoB of 0.5x to meet the mid-point of the guide," Bank of America analysts commented.

"This should be achievable given minimal orders from Taiwan (TSMC) and US (Intel and Micron). We note ASML would only need ~€5.5bn of orders for each quarter in H2 to get to the higher end of this guide," they added.

BofA reiterated a Buy rating and the price target of €1,101 on ASML.

By Vahid Karaahmetovic

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