Today, the Dutch lithography giant $ASML Holding (ASML.US)$released its Q2 financial results.
Due to the demand for ai chips, ASML's second quarter revenue and sales exceeded expectations, and new orders were higher than the first quarter; however, ASML's Q3 revenue guidance fell short of analysts' expectations.
Q2 results exceeded expectations.
Specifically, ASML's second-quarter revenue was 6.24 billion euros, compared with 5.29 billion euros in the same period last year, and the market cap was expected to be 6.025 billion euros.
Net income is 1.578 billion euros, up from 1.224 billion euros in the same period last year; basic earnings per share are 4.01 euros, up from 3.11 euros in the same period last year; gross margin is 51.5%, higher than expected.
ASML's new orders in the second quarter were 5.57 billion euros, an increase of more than 24% year-on-year, greatly exceeding analysts' expectations of 4.41 billion. Among them, 2.5 billion euros are for EUV lithography machines.
During the same period, ASML's R&D expenses reached 1.101 billion euros.
ASML expects sales of 6.7 billion-7.3 billion euros in Q3, less than the analyst's expectation of 7.46 billion; expected gross margin in Q3 is 50% to 51%; expected R&D costs are about 1.1 billion euros and sales, general and administrative expenses are about 0.295 billion euros.
The outlook for the full year 2024 remains unchanged. ASML previously referred to 2024 as a "transitional" year, as it expects the semiconductor industry to begin to recover after a difficult 2023.
Continued recovery is expected in the second half of the year, with strong growth in 2025.
ASML President and CEO Fu Ke Li said:" As with the previous quarters, the overall inventory level of the semiconductor industry has continued to improve, and we have also seen that the utilization rate of lithography equipment by both logic and memory chip customers is further increasing. Although the market still faces uncertainties, mainly due to macro-environmental factors, we expect the semiconductor industry to continue to recover in the second half of the year. "
"We view 2024 as a year of transformation and will continue to invest in capacity expansion and technology. We currently see the strong development of AI, which has driven the recovery and growth of most industries and is ahead of other niche markets."
Some of the world's largest chip makers are building new semiconductor manufacturing plants in the United States, such as Taiwan Semiconductor and Samsung. These projects will be equipped with equipment from 2025 to 2027.
"We expect the industry to enter a cyclic recovery in 2025. Therefore, we need to prepare for the many new factories that are currently being built around the world. These wafer factories will be distributed in various regions and have strategic significance for all of our customers. They all plan to use our systems." Fu Ke Li said in a pre-recorded video.
49% of revenue depends on China.
The company is also facing geopolitical resistance. Under pressure from the United States, the Dutch government last year introduced measures to restrict the export of advanced semiconductor equipment, including ASML's machinery.
ASML previously stated that export restrictions will affect 10% to 15% of its sales in China this year.
However, China remains a key component of ASML's Q2 business, accounting for 49% of sales, the same as the previous quarter.
Since the beginning of this year, with the overall rise of semiconductor sector, the stock price of ASML Holding has also accumulated a growth of over 41%. However, due to lower-than-expected Q3 revenue and gross margin guidance, ASML Holding dropped sharply during pre-market trading, falling by 5.88% as of the time of publication. Overnight trading also saw a drop of about 7% to below $1000.
Edited by Jeffrey
