ASML Q1 Profit Down; Sees Sequentially Higher Sales, But Weak Margin In Q2

(RTTNews) - Dutch semiconductor equipment maker ASML Holding NV (ASML) reported Wednesday lower profit in its first quarter with weak net sales. Looking ahead, for the second quarter, the company projects sequentially higher net sales, but weak margin.

Net income for the first quarter fell to 198.0 million euros from last year's 402.7 million euros. Earnings per share declined to 0.46 euro from 0.93 euro in the prior year.

Total net sales for the quarter dropped to 1.33 billion euros from 1.65 billion euros in the previous year.

Net system sales were 855.8 million euros, lower than 1.25 billion euros a year ago. Net service and field option sales, however, increased from last year.

In the quarter, sales of systems fell to 33 units from prior year's 47 units. Average selling price of system sales was 25.9 million euros, compared to 26.5 million euros a year ago.

Looking ahead, for the second quarter, ASML expects net sales at approximately 1.7 billion euros, and a gross margin of around 42 percent.

ASML President and Chief Executive Officer Peter Wennink said, "We expect our second-quarter net sales to increase substantially from the first quarter, as our leading-edge logic customers begin to ramp the 10 nanometer node. Simultaneously, we see continued investment in earlier nodes, notably in the 28 nanometer node."

The company said its second-quarter net sales guidance includes about 110 million euros sales for two EUV systems. In accordance with applicable accounting standards, ASML can only recognize part of the system revenue but must recognize the full cost. Together with the initially low profitability of early EUV systems, this has an expected negative impact of 5 percentage points on the gross margin.

In Amsterdam, ASML shares were trading at 89.34 euros, up 1.24 percent.