ASML increased Q3 net income by 69 percent from 2019

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ASML first quarter profits up 10 percent from last year.
Image: ASML

October 14—ASML Holding NV’s third-quarter earnings report revealed the manufacturer grew its net income by 69.3 percent year-over-year. The firm’s spike in profit is due to increased demand for its extreme ultraviolet lithography (EUV) machines.

The Dutch manufacturer also issued a negative forecast for the fourth quarter and a brighter outlook for 2021.

ASML’s Robust Q3 Results

In the period ending September 30, ASML brought in €1.06 billion ($1.24 billion) in net revenue, up from €627 million ($735 million) in Q3 2019. The corporation also generated €3.958 billion ($4.647 billion) in gross income, which tops sales from the year prior by 32.5 percent.

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The firm’s robust performance exceeded the guidance it issued in July, which predicted sales of €3.8 billion ($4.46 billion).

ASML enjoyed a spike in its Q3 intake due to the surging popularity of its industry-leading wafer etching machines.

The firm is the sole provider of equipment capable of producing ultra-powerful yet energy-efficient processors and memory modules. Consequently, it has received increased orders from chipmakers like Taiwanese Semiconductor Manufacturing Company (TSMC) and Samsung.

The two companies have grown their business this year because EUV ASML’s have given them a distinct market edge.

ASML’s Mixed Outlook

Although its machinery stands at the forefront of semiconductor processing technology, ASML anticipates a decline in business in the current quarter.

The firm expects to make €3.6 billion ($4.22 billion) to €3.8 billion ($4.46 billion) in Q4. That means the company predicts its sales to fall by 12.1 or 6.21 percent annually this period. Bloomberg reports Wall Street pegged the manufacturer’s holiday season revenue at €3.72 billion ($4.36 billion).

ASML’s share price fell by 2.5 percent after the publication of its weak Q4 earnings guidance.

Despite its underwhelming near-term forecast, the firm believes its UAV revenue will increase 20 percent year-over-year in 2021. It also anticipates yearly revenue of €15 billion ($17.6 billion) to €24 billion ($28.1 billion) through 2025. Moreover, the company moved to reassure investors by restarting the €6 billion ($7.04 billion) stock buyback plan it paused earlier this year.

The equipment vendor expects its income to grow due to the rising adoption of leading-edge technologies like 5G. As TSMC and Samsung view fifth-generation mobile data networking as a major growth driver, they will continue buying the latest semiconductor processing tools to secure their market positions.

Because of its ongoing supply deals with both chipmakers, ASML’s long-term future looks rock solid.

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