ASML, a leading semiconductor company, recently released its financial results for the third quarter of 2024, ending on September 29, 2024. The company lowered its outlook for the year 2025, citing technical issues that led to the early release of the results.
In the third quarter of 2024, ASML reported revenues of 7.47 billion euros, surpassing analysts‘ expectations of 7.17 billion euros. The net profit stood at 2.08 billion euros, compared to 1.91 billion euros in the same period last year. Earnings per share (EPS) reached 5.28 euros, showing growth from 4.81 euros in the previous year.
ASML operates in two main segments: systems (high-tech chip manufacturing equipment) and services and field operations. Revenues from the systems segment increased year-over-year from 5.31 billion euros to 5.93 billion euros, exceeding the consensus estimate of 5.73 billion euros. On the other hand, revenues from services and field operations grew from 1.36 billion euros to 1.54 billion euros, surpassing the market prediction of 1.43 billion euros.
The company’s gross margin reached 50.8%, slightly lower than the expected 50.7%. Research and development expenses decreased by 4.1% to 1.06 billion euros, below the consensus of 1.11 billion euros. Operating profit reached 2.44 billion euros, beating expectations of 2.24 billion euros and showing a 33% increase from the previous quarter.
Looking ahead to the fourth quarter of 2024, ASML projects revenues between 8.8 and 9.2 billion euros, slightly below the expected 8.95 billion euros. The gross margin is forecasted to be between 49 and 50%, lower than the anticipated 50.5%. Research and development expenses are estimated to be around 1.1 billion euros, below the predicted 1.13 billion euros.
For the full year 2024, ASML expects revenues of 28 billion euros, surpassing the expected 27.71 billion euros. However, the company has revised its outlook for 2025, now projecting a gross margin between 51 and 53% and revenues between 30 and 35 billion euros, lower than the previous estimate of 30 to 40 billion euros.
CEO Christophe Fouquet commented on the results, noting the slower-than-expected recovery in certain market segments and the cautious outlook for 2025. Analysts have expressed concerns about the delayed market recovery and its impact on the overall chip industry, particularly with Intel and Samsung facing challenges.
Following the early release of the results, ASML’s stock price dropped by 19.4%. ASML is listed on Xetra (ticker: ASME) and in the US through ADR (ticker: ASML).
In conclusion, ASML’s financial results for the third quarter of 2024 reflect a mixed performance, with strong revenue growth in the systems segment but challenges in other areas. The company’s revised outlook for 2025 signals a more cautious approach due to market uncertainties. Investors and analysts will closely monitor ASML’s performance in the coming quarters to assess its resilience in a changing market landscape.