Shares of ASML Holding (NASDAQ: ASML) fell on Wednesday following a gloomy sales outlook despite posting better-than-expected third-quarter earnings.
The Netherlands-based semiconductor equipment vendor reported earnings equivalent to $5.23 per share on sales of $7.26 billion for the September quarter.
Analysts surveyed by FactSet had predicted ASML earnings of $4.92 per share on sales of $7.19 billion. Comparatively, in the same period last year, ASML had earnings of $4.20 per share on sales of $5.66 billion.
In addition, ASML has announced its sales outlook for the current quarter. The company is projecting sales of $7.28 billion for the upcoming quarter, in line with the midpoint of its guidance. However, this figure is slightly lower than analysts’ expectations, who were anticipating sales of $7.31 billion. It is worth noting that ASML’s sales for the same quarter last year were $7.01 billion.
ASML stock plummeted by 5.30% to $576.43 following the news.
Chief Executive Peter Wennink foresees a flat sales performance for the coming year.
Peter Wennink stated in the press release that the semiconductor industry is currently going through the bottom of the chip cycle. He also mentioned that their customers expect to see a visible inflection point by the end of this year. Furthermore, he elaborated that customer uncertainty regarding the industry’s demand recovery trajectory persists. Therefore, he anticipates that 2024 will mark a transition period for the company.
He went on to add,
“Based on our current perspective, we take a more conservative view and expect a revenue number similar to 2023. But we also look at 2024 as an important year to prepare for significant growth that we expect for 2025.”
Furthermore, ASML Holding (NASDAQ: ASML) faces additional challenges in the form of increased trade restrictions with China, posing a substantial obstacle for the company and the broader semiconductor industry.
Bernstein analyst Sara Russo maintained a “market perform” (neutral) rating on ASML stock. She expressed disappointment with the company’s 2024 flat revenue guidance, as consensus estimates had called for mid-single-digit percentage growth.