ASML Sales Rise in Second Quarter on New Product Push
Semiconductor production equipment maker ASML Holding (ASML) - Get Report saw net revenue advance 5.2% year-on-year to €1.74 billion ($1.91 billion) from €1.65 billion as it enjoyed volume growth in a majority of its product lines and pushed forward with the sales of an upgraded equipment.
Meanwhile, ASML also saw net income drop 4.3%, to €353.8 million from €369.7 million and diluted earnings per share to €0.83 from €0.85 in the second quarter.
The Veldhoven, Netherlands-based company, which supplies its equipment to all of the world's top chip makers, said that in the quarter, sales of ArF immersion systems progressed well. It also said it took in four new orders from foundry and memory customers for its next-generation extreme ultraviolet (EUV) lithography system, taking the company's production backlog for the system to 10 units worth €1 billion.
For the third quarter, ASML expects net sales of around €1.7 billion, while for the full year it expects sales to beat the record level booked in 2015. The company said full-year earnings will partly depend on the timing of revenue recognition for the EUV systems. CEO Peter Wennink said that the company expects to take additional orders for EUV systems for the second half of this year.
Including orders for EUV, the backlog increased to €3.37 billion in the second quarter from €3.02 billion a year ago.
One analyst was not so optimistic about the next-generation equipment.
"In the longer term we do not expect EUV to create a material acceleration in ASML's revenue trends, as a result of which we expect ASML's guidance of €10 billion of revenues in 2020 to be missed," said Liberum Capital analyst Janardan Menon.
Menon added that weakening smartphone demand, low memory prices, and the completion of Intel's fab conversion in China will likely put pressure on ASML's earnings outlook for 2017.