ASML Holding ( NASDAQ:ASML )
Earlier in the day, shares of ASML Holding ( NASDAQ:ASML ), a Dutch semiconductor equipment major, jumped 8.2%. However, as of 2:40 PM ET, the ASML stock had retraced to a 6% gain.
Last night, the specialized firm that monopolizes extreme ultraviolet (EUV) technology announced financial results for the third quarter, showing sales and profitability beyond projections. In addition, management provided optimistic forecasts for the next fiscal period.
Semiconductor equipment stocks had been hurt by worries regarding a chip slowdown next year and newly announced curbs on sales to China, so the beat came against the background of a significant decline in the stock price. However, the study from ASML stock seemed to ease such anxieties… at least temporarily.
What’s the Reason?
ASML’s third-quarter revenue was 5.8 billion euros, up 10.2% year over year. Its profits per share were 4.39 euros, a record high for the company. Both of those numbers are better than anybody anticipated. ASML stock also announced a sequential increase in net bookings to 8.9 billion euros. A substantial sequential increase is expected in the coming quarter, with management projecting sales between 6.1 billion and 6.8 billion euros.
For several reasons, it was encouraging to see the rapid expansion. To begin, ASML’s revenue growth has been lower than expected this year due to significant supply restrictions. Constraints like these have decreased gross margin, but the most recent quarter’s results showed a healthy 51.8%. Although it was below last year’s levels, it exceeded projections.
Second, many were concerned that some memory and chip makers’ recently announced reduction in capital spending plans would harm fourth-quarter sales. Still, given how much higher demand has been this year than supply, it doesn’t seem like this will be the case for ASML stock. ...
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