ASML sees no recovery before H2 2002
This is a little old but ASML is now at or near 52 week lows and critical support levels so it might be worth revisiting.
biz.yahoo.com
(UPDATE: Adds closing shares in paragraph 4)
By Jana Sanchez
AMSTERDAM, July 18 (Reuters) - Dutch semiconductor equipment maker ASML Holding NV (NasdaqNM:ASML - news) Said on Wednesday it saw no sector recovery before the second half of next year after it plunged, as expected, into a loss in the first half of 2001.
``It's the worst (sector) decline in terms of steepness of fall and the depth of the fall for at least 21 years, and I suspect ever,'' Chief Executive Doug Dunn told a news conference.
Shares in ASML, the world's largest maker of machines that map out semiconductor circuitry on silicon wafers, which had hit a low of 22.50 euros earlier in the session, recovered after an analyst meeting, as analysts said they were encouraged by the company's prospects for this year's second half.
ASML closed 0.3 percent higher at 23.41 euros, still about 28 percent off a five-month high reached in May.
Dunn said it was impossible to give an explicit forecast for the year as he could not predict how many order cancellations and new orders the company would get, but said it was unlikely to get better
before the second quarter of next year.
``My only future guidance is that there will be no future guidance just yet. It will turnaround, I just don't know when.''
ASML said it would cut capital expenditure, but would avoid laying off large numbers of its highly skilled staff.
``We have the responsibility to be sure we are ready for a rapid uptake,'' Dunn said.
ASML posted a first half net loss of 96 million euros ($82 million) compared to 149 million euros a year ago, slightly better than expected. Analysts polled by Reuters expected a loss of 95-109 million euros, with consensus at 103 million.
ASML told analysts that 45 percent of its backlog was for delivery this year.
``We estimate that they could deliver another 85 to 90 units this year and that is higher than many people were thinking. The second half is unlikely to be dramatically lower,'' said ING Barings analyst Eric de Graaf.
LOSSES IN LINE
The net loss was also in line with the 95-105 million euro guidance ASML gave earlier this month, when it also withdrew optimistic expectations for a recovery later this year.
``The sector has already been beaten to a pulp, the market has already taken bad earnings into account... The loss is no disappointment but the outlook is, because they expect a recovery to set in later than expected,'' said Eureffect asset manager Krijn Moens.
``The current earnings indicate that every company in the sector is having a hard time, but given ASML's technology and know-how it is one of the obvious shares to invest in the moment the sector recovers,'' Moens said.
ASML figures follow those of Philips Electronics and Intel (NasdaqNM:INTC - news), the world's largest chipmaker and now an ASML client. Philips, which holds a minority stake in ASML, said on Tuesday it could report its first annual loss in nine years.
FORECASTING HEADACHE
ASML, which became the world's leading stepper and scanner maker with the purchase of California-based SVG in May, entered the downturn after its customers and is likely to see an upturn only when chipmakers' confidence returns.
``Almost all our customers have indicated that their visibility on a recovery of semiconductor order intake and related sales is very low,'' ASML said.
Bert Siebrand, analyst at SNS Securities said the once clear horizon had vanished.
``So far they've been willing to give guidance and have been very self-confident... Now they refuse to say anything. We are now totally left in the dark,'' Siebrand said.
Dunn said: ``Major semiconductor companies are reporting capacity as low as 45 percent, 40 percent and in one case, 35 percent. Why would they buy more capacity equipment?''
In July, ASML said it expected to ship fewer than 230 units -- which sell for about 10-12 million euros each -- in the year. Many analysts have pencilled in around 190 to 200 units. Dunn declined to give a firm forecast again on Tuesday, saying orders could arrive but others could be cancelled.
ASML took an additional first half hit from its drawn-out takeover of SVG. U.S. regulatory delays, including the referral of the deal to President George W. Bush, pushed expenses up to 53 million euros from 40 million. Dunn said that should be it.
ASML said its order backlog appeared robust in tough market circumstances, but most orders are now for 2002 delivery.
The company said it had 640 million euros of available cash, and said that should be enough to last it through the downturn.
Intel late on Tuesday reported a 76 percent fall in second quarter profits, but gave very wide guidance for third quarter sales, holding out the prospect of a second half rebound. |
