A couple of interesting WSJ articles:
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ASM Litho Sees Orders Slow;
Analysts Cut Estimates
By LINAWATI SIDARTO
Dow Jones Newswires
AMSTERDAM -- Dutch semiconductor equipment
maker ASM Lithography NV (ASMLF) became the
latest victim of the Asian financial crisis Thursday when it
laced its interim earnings with news of a weakened order
book.
ASML's shares plunged on the news and analysts
expressed worries about the short-term performance of
the company. Some lowered their full year estimates.
While ASML's half-year numbers in themselves weren't
that bad, the low level of orders for their products so far
was 'shocking, a lot worse than expected,' said Neil
Barton, analyst with Merrill Lynch.
ASML only received orders for 31 systems in the first
half of 1998, far less than the 136 it had in the same
period last year.
The number of orders resulted in a backlog worth
NLG1.0 billion as of June 30, from NLG1.6 billion on
Dec. 31, 1997.
ASML's six-month net profit was down 4.8% to NLG140
million from the same period in 1997.
Barton said that, after seeing the results, he had
downgraded his estimates for ASML's 1998 net profit to
NLG195 million from an earlier estimate of NLG294
million.
He now sees earnings per share coming in at NLG1.41
from a previous estimate, made in June, of NLG2.13.
In 1997, ASML's net profit reached NLG329 million and
per-share earnings were NLG2.39.
On the Amsterdam market, ASML plunged NLG7.10, or
11%, to NLG56.50. the AEX benchmark closed at
1280.06 points, down 17.82 points or 1.4%..
ASML's chief executive officer, Willem Maris, said
Thursday that business volume for the second half won't
be strong and could well be below the first half of 1998.
He added that net profit for this year is expected to be
'substantially below 1997 levels.'
Maris pointed out that, prior to the crisis, Asia was the
fastest growing market for information technology.
More than half of ASML's sales are generated in Asia. In
the first half of this year, 58% of sales went to Taiwan,
South Korea and Singapore.
Maris emphasized that his company has tried to 'assist' its
customers by easing payment terms for its South Korean
customers, which made up 24% of ASML's total sales for
the the first half of this year.
Siebrand of SNS estimated that ASML's market may only
get better around the second quarter of next year.
'In the next few months, it doesn't seem like orders will be
coming in,' he said. Siebrand will lower his 1998 earnings
per share estimate 'closer to NLG1.50,' from NLG1.92
after Thursday's figures.
Maris also said the company will reduce the level of
components subassemblies that are provided to ASML by
suppliers in order to 'continue effective management our
balance sheet in the second half.'
The chairman noted however that ASML will continue its
research and development program and capital
expenditure on new facilities.
'When the market picks up again, ASML will be ready to
take the next step forward to further growth,' Maris said.
Analyst agreed, saying that, if the Asian crisis blows over,
companies will need the advanced products of ASML.
-By Linawati Sidarto;
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July 23, 1998
ASML CEO Says Short Term
Outlook For Semiconductors
Bleak
Dow Jones Newswires
AMSTERDAM -- The short-term outlook for growth in
the information technology market, particularly in
semiconductors, remains bleak, ASM Lithography NV
(ASLMF) Chief Executive Officer Willem Maris said
Thursday.
"The global semiconductor sector is holding its breath at
the moment," Maris said.
Maris, speaking at a press conference, pointed out that
the financial crisis in Asia has had a global impact.
He added that, prior to the crisis, Asia was the fastest
growing market for the information technology industry.
Maris stressed that the global demand for semiconductors
"has been very poor," and that it was difficult to predict
when the slump will cease, adding "nobody knows the
answer to that now."
"Some analysts have said that it would get better by the
middle of this year, but that has not happened yet," Maris
said.
ASML, which develops and manufactures wafer
steppers, which are key for the fabrication of
semiconductors, said that orders for the company this
year have dipped.
The company said the sales of wafer steppers on the
global market will decrease to around $3 billion in 1998,
from $3.6 billion in 1997.
However, Maris said the downward spiral will not last, as
world demand for advanced technology will only go up in
the long-term. He expressed hope that estimates that the
wafer stepper market would reach global sales of $7.2
billion by 2002 could be reached.
-By Linawati Sodarto
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