Sat, May 18, 2024

ASML Q1: Sales Drop 21.6%, Profit Beats with €1.22B

Broker News, asml

Quick Look: 

  • ASML reports mixed Q1 2024 results: Sales €5.29B, profits decline 40.39%.
  • Christophe Fouquet appointed as new CEO; maintains €27.6B full-year sales forecast.
  • China sales hit €2B, 49% of total; U.S.-led export curbs affect semiconductor industry.
  • ASML expands US presence; anticipates industry rebound by 2025 with continuous investments.

ASML is a global leader in semiconductor lithography systems. The company has reported mixed financial outcomes for the first quarter of 2024. The company highlighted this period as a “transition year,” with significant fluctuations in sales and bookings, though it managed to surpass profit expectations amidst a complex economic environment.

Q1 Financials: Sales €5.29B, Profits Decline 40.39%

In Q1 2024, ASML’s net sales were recorded at €5.29 billion, reflecting a decrease of 21.6% year-on-year and falling slightly short of the expected €5.39 billion. Conversely, net profit stood at a stronger-than-anticipated €1.22 billion, surpassing analyst predictions of €1.07 billion. However marking a sharp 40.39% decline from the €2.05 billion reported in the previous quarter. New bookings were also down, coming in at €3.6 billion versus the forecasted €5.4 billion, a 33.33% reduction from the previous quarter.

ASML Leadership Change, Maintains €27.6B Forecast

ASML’s quarter was also marked by strategic and leadership changes, notably with the announcement of Christophe Fouquet as the new CEO effective April 24, 2024. This change is expected to guide ASML through expected improvements in the second half of the year. Despite these leadership transitions, ASML maintains its full-year sales forecast at €27.6 billion, steady with 2023’s figures.

Geopolitical Shifts: China Sales Reach €2B

The report comes amid evolving geopolitical landscapes, notably U.S.-led export curbs on advanced semiconductor equipment. This has particularly impacted Chinese chipmakers, who are increasingly focusing on older technology generations not covered by current restrictions. Notably, sales to China accounted for €2 billion, or 49% of ASML’s total sales, underscoring the significance of the region to ASML’s business.

Global Expansion, US Act Boosts ASML Capacity

ASML continues to cement its role as a critical player in the global semiconductor industry. The company is expanding its production capacity in America, supported by the US CHIPS and Science Act, and in collaboration with industry giants such as Taiwan Semiconductor Manufacturing Co., Samsung, and Intel. This expansion aligns with signs of recovery in global semiconductor demand, such as the rebound observed by Samsung in memory chips and anticipated capacity additions across major markets, including China, Taiwan, and South Korea.

ASML Projects Strong Future, Eyeing 2025 Rebound

In anticipation of the future, ASML’s CFO confidently foresees robust secular trends and anticipates an industry upturn by 2025. This optimistic outlook and continuous investments in capacity ramp-up and technology innovation position ASML to capitalize on future market recoveries and sustain its leadership in the fiercely competitive semiconductor industry.

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