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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (40900)	10/15/2008 11:28:22 AM
From: Donald Wennerstrom	Read Replies (3) \| Respond to of 95881

ASML Profit Falls 56 Percent on Lower Machine Sales By Marcel van de Hoef Oct. 15 (Bloomberg) -- ASML Holding NV, Europe's largest maker of semiconductor equipment, said third-quarter profit fell 56 percent on lower machine sales after chipmakers delayed expansion plans. Net income plunged to 73.3 million euros ($99.5 million), or 17 cents a share, from 166.3 million euros, or 35 cents, a year earlier, Veldhoven, Netherlands-based ASML said in a statement today. Sales sank 25 percent to 696.5 million euros. ASML, the maker of $29 million machines that fabricate chips for Apple Inc.'s iPods and Nokia Oyj's mobile phones, is being hurt by the freeze-up in credit markets, said Margarita Shevtsova at Keijser Securities NV. Full-year sales will drop ``around'' 20 percent this year, ASML said. ``The numbers are good, but the outlook is disappointing,'' said Margarita Shevtsova at Keijser Securities NV. ``They're not doing anything wrong. Customers have financing issues. In these difficult times, it's a problem for everybody.'' Analysts had anticipated profit of 65 million euros, the average of nine estimates compiled by Bloomberg. They had estimated sales of 683.1 million euros. Shipments declined to 37 machines from 59 machines a year earlier, the company said. ASML fell 7.5 percent to 10.09 euros at 9:02 a.m. in Amsterdam trading. Before today the stock declined 50 percent this year, compared with a 45 percent slide in the Amsterdam Exchanges Index. On July 16, the company predicted full-year revenue would ``potentially drop by as much as 20 percent'' from last year. Research firm Gartner Inc. on Oct. 8 cut its forecast for global spending on semiconductor equipment this year, citing the economic slowdown and oversupply in the market for memory chips. Gross Margin The company forecasts it will ship 26 machines in the current quarter with an average selling price of 16.5 million euros. Before today, analysts had estimated fourth-quarter shipments of 29 systems with an average price of 18.9 million euros. The gross margin, or the percentage of sales left after subtracting manufacturing costs, will fall to about 36 percent this period, compared with 38.1 percent in the third quarter. There has been a ``significant weakening'' in demand for capacity expansion in the last two to three months, the company said in a presentation posted on its Web site. ``Access to capital is difficult for our customers,'' Chief Financial Officer Peter Wennink said in a video interview on the Web site. ``Many of our customers are now in a hesitant mode, in a wait-and-see mode, and are looking at their own financials to see whether they can afford buying our tools.'' Bookings Decline Bookings in the third quarter fell 23 percent to 31 systems. That beat the median estimate of nine analysts for 25 machine orders, in a Bloomberg News survey. Equipment spending is on pace to drop 25.7 percent to $47.1 billion this year, according to Gartner. Lithography, the area in which ASML operates, will be the strongest segment with an estimated 15 percent slide in revenue, it said. In July, Gartner predicted sales of semiconductor gear would drop 19.8 percent. ASML is the world's third-largest maker of semiconductor equipment, trailing Applied Materials Inc. and Tokyo Electron Ltd. The company's main rivals are Nikon Corp. and Canon Inc., both from Japan. Intel Corp., the world's largest maker of semiconductors, late yesterday said fourth-quarter sales may rise, signaling that the global financial crisis hasn't halted demand for personal computers. Chief Executive Officer Paul Otellini told investors he didn't anticipate a repeat of 2001, when spending on technology shrank after the dot-com bubble burst. Intel's third-quarter net income climbed to $2.01 billion from $1.79 billion, while revenue rose 1.3 percent to $10.2 billion. bloomberg.com <<As this report is posted, ASML is trading up about 3.4 percent at 15.12>>