ASML tops view as profit rises 17%
Strong bookings, positive outlook boost shares
Last Update: 10:57 AM ET Oct. 12, 2005
LONDON (MarketWatch) -- ASML Holding, Europe's largest semiconductor-equipment maker, Wednesday posted an outlook-beating 17% rise in profit.
And ASML said it expects stable orders in the fourth quarter, suggesting a recovery in the sector may be back on track.
ASML shares were up 2.8% in late afternoon Amsterdam trade.
"The third quarter has shown a business pickup," Chief Executive Eric Meurice said in a conference call.
"We expect order intake at about the same level in the fourth quarter of 2005 as in the third quarter of 2005. The first half of 2006 will be strong."
Net income for the third quarter rose to 48 million euros ($57 million) from 41 million euros, topping consensus forecasts. The rise in profit was helped by a 13% sequential decline in SG&A expenses.
ASML took orders for 46 new systems in the third quarter at an average selling price of 15.8 million euros, compared with 80 systems in the year-earlier quarter and 24 in the second quarter. Analysts had expected bookings of around 37 systems.
Chief Financial Officer Peter Wennink said market share will be in the high 50s in 2005, compared with 52% in 2004. And he said ASML will grow in 2006 despite a lackluster industrial environment.
ASML makes machines to help customers such as Samsung Electronics and Intel Corp. build smaller, more complex chips. Rivals include Canon and Nikon.
Order book looks good
Order backlog as of Sept. 25 stood at 1.245 billion euros compared with 987 million euros in the previous quarter.
"Order backlog is key, and here the company seems quite comfortable," analysts for Nomura International told clients,
The average selling price for a new system in the third quarter came in at 15 million euros, suggesting that the shipment mix is moving toward leading-edge products. The ASP for all ASML machines in the quarter, including refurbished ones, was 11.8 million euros.
"The better-than-expected ASP on new-system orders confirms our expectation that ASML is winning in the new technologies," SNS Securities said.
Analysts from Goldman Sachs agreed.
"ASML continues to make significant progress, is taking orders for its new high-end tools, especially immersion, driving order ASPs higher than expected," it said.
Sales declined 13% to 533 million euros in the third quarter, but the company said the decline was anticipated in view of the current state of the semiconductor industry.
ASML said it expects to ship 40 systems in the fourth quarter with an anticipated gross margin of between 36% and 38%. Gross margin came in at 37% in the third quarter.
Expenses for the fourth quarter are seen lower than in the third one. |
