ASML Shares Fall As Europes Biggest Tech Company Predicts Flat Sales In 2024 After 71% Order Drop

Shares in ASML Holding NV fell on Wednesday after the semiconductor carmaker forecast flat sales for 2024 as orders fell 71% year-on-year.

ASML, founded in Wellhoven, +0.31% ASML, -0.07% The company, now Europe's largest technology company, said the sector could soon see a "tipping point" as it predicted "tremendous growth" by 2025, which eases the impact of US export controls.

The Dutch company met analysts' estimates for third-quarter revenue of 6.67 billion euros ($7.04 billion), compared with the 6.73 billion euros expected by 20 analysts, FactSet reported. .

Shares in ASML of the Netherlands fell 2.5%, while US-listed shares fell 3% after the results. The stock showed an increase of about 11 percent. .

Analysts said ASML's share price fell due to low orders.

Analysts at JP Morgan called ASML's third-quarter orders "very weak" at just 2.6 billion euros, down 71 percent from the same period in 2022.

Speaking to investors, ASML CFO Roger Dawson admitted that orders were "down from last quarter", noting that the current climate had made customers "very cautious about cash".

The tech giant said it sold 106 new lithography machines worldwide in the third quarter, up from 86 in the third quarter of 2022. Selling their multi-million dollar vehicles along with other services turned ASML into a profit. EUR 4.81 per share.

Noting that SML's profit was slightly better than analysts' expectations, the company posted a 51.9% margin on sales and a gross profit of 3.46 billion euros. Analysts polled by FactSet expected the company to post earnings of €4.64.

Looking ahead, the company's CEO, Peter Weinick, said: 2024 will be a "transition year" but 2025 will be a period of "peak growth" even if sales in 2023 are the same.

"The semiconductor industry is currently at the end of a cycle, and our customers expect to see an inflection point later this year," Wenick said.

Dasson added that ASML now has an order book worth 35 billion euros, adding that the development of artificial intelligence and the continuation of the global energy transition will boost the company's sales in the future.

Analysts at JP Morgan said investors were now looking to the broader sector to gauge "where the cycle is" and that the business was strong "despite recent risks".

ASML's position as the world's sole supplier of ultraviolet (EUV) lithography machines puts it in an excellent position to take advantage of the global adoption of high-tech EUV machines, bank analysts said.

Meanwhile, rising geopolitical tensions between China and the West could benefit ASML as the rival powers seek to develop their semiconductor manufacturing capabilities.

Dawson said the new U.S. restrictions on shipments of semiconductor manufacturing equipment announced Tuesday would affect a "limited number" of semiconductor manufacturing facilities in the country and have some impact on earnings.

It's worth noting that ASML accounted for 46% of system sales in China in the third quarter and 24% in the second quarter. Most of Dasan's sales in China are mainly driven by orders from 2022 onwards.

Big energy business for the electric car industry