ASML Cuts Guidance in the Face of Supply-Chain Issues. The Chip Stock Is Falling.
a critical supplier of manufacturing equipment to the semiconductor industry, cut its revenue guidance for the next quarter as it faces issues including a materials shortage in its supply chain, the company said Wednesday.
Shares in the Dutch group, which trade on the Nasdaq, fell 2.6% in U.S. premarket trading, while the Amsterdam-listed stock was 1.7% lower in early European trading.
In its outlook for the current quarter, ASML (ticker: ASML) said it expects sales to be between €4.9 billion ($5.7 billion) and €5.2 billion with a gross margin between 51% and 52%. That makes fourth-quarter earnings guidance 4% below consensus expectations, according to analysts at Swiss bank UBS. ASML said it expects revenue growth in 2021 “approaching” 35%, which UBS noted was a change in language from previous guidance of growth “around” 35%.
The company’s chief financial officer said in a video interview released by ASML that guidance was hit by a materials shortage in the supply chain. These issues have come as the company has tried to gear up its capacity, Roger Dassen said, and are “not unique to ASML obviously.” He added that internal problems related to the start-up of a new logistics center further weighed on outlook.
ASML bills itself as “the most important tech company you’ve never heard of.” The Veldhoven, Netherlands-based group builds equipment for manufacturing semiconductors, supplying major chip makers including
Its core product is lithography systems—where it holds a near-monopoly—which are a critical part of the chip-making process. ASML is also a pioneer in extreme-ultraviolet (EUV) lithography, which is the much-anticipated next generation of the technology.
More broadly, ASML’s financial results for the third quarter were positive. Net sales increased more than 30% from the second quarter, to €5.2 billion. Net income climbed 68% to €1.7 billion as earnings per share rose 69% to €4.27. Net sales came in slightly below analyst expectations while net income was higher than estimated, according to FactSet data. The company also reported record shipments and revenue in its EUV business.
“The demand continues to be high. The ongoing digital transformation and current chip shortage fuel the need to increase our capacity to meet the current and expected future demand,” said ASML’s president and CEO Peter Wennink.
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