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At this time, I would like to draw your attention to the Safe Harbor statement contained in today's press release and in our second quarter results presentation both of which you can find on our website at www.asml.com. This Safe Harbor statement will apply to this call and all associated presentation materials. The length of the call will be 60 minutes as normal.Now I would like to turn the call over to Eric Meurice for a brief introduction. Eric Meurice Thank you, Craig. Good afternoon. Good morning. Thank you for attending our conference call. As usual, before we begin the Q&A session Peter and I would like to provide an overview and commentary on the second quarter result and provide an outlook for the year. I will myself complete the introduction with some further comments on market view longer-term and about our strategy. So Peter please if you will. Peter Wennink Thank you Eric and welcome to everyone. Summarizing our second quarter; sales came in just about €1.2 billion which is essentially the same as in the previous quarter. This quarter sales remained largely skewed towards the foundry IDM sector which was about 73% including non critical Kaloyeros systems which are supporting the capacity additions. As in the first quarter only 9% of second quarter sales went to the DRAM sector with just under 20% going to NAND customers. The average selling price of all systems recognized in the second quarter was €22.4 million reflecting a bit higher Immersion shipments than the first quarter. Service and field option sales came in at a record of €243 million which is again driven by a significant adoption of system performance enhancing field options. Updating our previously announced share buyback program, as of July 10, 2012 last week, ASML has repurchased 33.2 million shares of which 7.5 million shares in 2012 for a total amount of €970 million of which €270 million in 2012 giving an average buyback price of €29. For regulatory reasons in connection with the customer co-investment program which we announced last week ASML has suspended its share buyback program from July 10, 2012 until further notice and we are then to resume share buybacks when permitted under applicable regulations.
The second quarter net bookings came in at 43 systems valued at €949 million, excluding EUV. Our booked average selling price came in at €22 million with the quarter’s booking profile seeing a significant moderation and Foundry orders at 36% of total orders, half of that, slightly half of what they were in the previous quarter. The balance of orders was almost evenly split between IDM’s NAND and DRAM. Our order backlog at the end of the second quarter was €1.5 billion excluding EUV by the way totaling 55 systems with a strong average selling price of €27.3 million.The backlog profile at the end of the quarter changed as combined memory moved upwards to 36% of total versus 23% at the end of the prior quarter. Most of that change coming from DRAM as it moved from 2% to 14% off the backlog; reminding you by the way that this change is already four high end units divided over three customers. As to the outlook, we estimate second half sales coming in between €2.2 billion and €2.4 billion with the third quarter estimate at €1.2 billion and gross margin of 43%. R&D and SG&A expenses will be about €145 million for R&D and €60 million for SG&A which is slightly above the previous quarters as we decided to upgrade and invest in our IT infrastructure throughout the remainder of the year. The second half looks to be sustained by an increase of system shipments supporting NAND shrink plans and by a low, but relatively stable level of DRAM system shipments. We see a lower 28 and 32 nanometer Logic shipments in the second half compared with the first half and we see IDM’s coming in slightly higher when compared to the first half of this year. Read the rest of this transcript for free on seekingalpha.com