ASML Holding NV (ASML) - Get ASML Holding NV Report shares traded lower Wednesday, pulling back from recent all-time highs, after the semiconductor equipment maker posted stronger-than-expected third quarter earnings amid solid demand for its multi-million dollar chip designers in what it described a "growth year" for the company.
ASML said earnings for the three months ending in September came in at €1.49 per share, down 6.9% from the previous quarter and just ahead of the Street consensus forecast of €1.45 per share. Group revenues, ASML said, rose 7.6% from last year to €2.787 billion while its profit margin slipped 440 basis points to 43.7%, topping its own estimate from earlier this year.
ASML said it sees fourth quarter revenues rising to around €3.9 billion, with a gross margin of between 48% and 49% as customer demand for its extreme ultraviolet lithography systems, or EUV, machines, which design complex chips used by, sector titans such as Samsung Electronics (SSNLF) , Intel Corp. (INTC) - Get Intel Corporation Report and Taiwan Semiconductor (TSM) - Get Taiwan Semiconductor Manufacturing Co. Ltd. Report and cost as much as €100 million each, increases.
"For the remainder of the year, we expect Logic to continue to be strong, driven by the leading-edge nodes supporting end-market technology and applications such as 5G and artificial intelligence. The timing of Memory recovery remains uncertain.
"We continue to make solid progress in EUV. Customers have introduced their first EUV manufactured devices and we have seen EUV mentioned in product announcements," said CEO Peter Wennink. "In the third quarter, we shipped seven EUV systems, three of which were NXE:3400C, our higher productivity model."
"We received 23 EUV orders in the third quarter which contributes to our highest ever value of bookings in one quarter," he added. "This strong order flow confirms the adoption of EUV in high volume manufacturing for Logic and Memory."
ASML shares were marked 0.95% lower in the opening hour of trading in Europe and changing hands at €240.60 each, after hitting an all-time high of €243.20 last night, in a move that extends the stock's year-to-date gain past 75%.
The company's order intake of over €5 billion mainly consisting of EUV tools "catches the eye", said analysts at the independent Benelux broker The IDEA. "In case it was not clear yet, this shows that the market has embraced EUV in high volume manufacturing for Logic and Memory. Not only was the order intake at a record high, according to our information, it is the first time its order backlog surpasses the €10 billion mark."