ASML Q3 Profit Climbs, Margin Down; Confirms FY17 Sales Growth View

(RTTNews) - Dutch semiconductor equipment maker ASML Holding NV (ASML) reported Wednesday higher profit in its third quarter as sales were boosted mainly with strong demand for DUV Systems. Meanwhile, margin declined. Looking ahead, the company projects sequentially lower sales in its fourth quarter. For fiscal 2017, the company maintained forecast for higher sales.

Chief Executive Officer Peter Wennink said, "With our fourth-quarter guidance, we are confirming our view that 2017 net sales will be at least 25 percent higher than 2016 net sales. Our current view is that the positive business environment that we are seeing today will continue in 2018, supported by our strong backlog of 5.7 billion euros, which is driven by all product categories."

In its third quarter, net income, on US GAAP basis, climbed to 557.1 million euros from last year's 395.9 million euros. Earnings per share grew to 1.29 euros from 0.93 euro a year ago.

Net sales were 2.45 billion euros, higher than prior year's 1.81 billion euros. Net system sales grew to 1.82 billion euros from 1.26 billion euros last year.

Net service and field option sales increased to 628.5 million euros from 556.9 million euros last year.

ASML said its net sales exceeded guidance, partially due to the revenue recognition of an additional EUV system, showing strong demand across the entire product portfolio.

Gross profit improved from last year, while gross margin dropped to 42.9 percent from prior year's 46 percent. Income from operations as a percentage of net sales declined to 26.8 percent from 27.3 percent a year ago.

In the quarter, sales of lithography systems increased to 55 units from 40 units last year. Value of systems backlog was 5.69 billion euros, higher than 3.46 billion euros a year ago.

Lithography systems backlog climbed to 122 units from 76 units in the prior year. Value of booked systems grew to 2.15 billion euros from last year's 1.42 billion euros. Net bookings of lithography systems improved to 70 units from 43 units a year earlier.

Looking ahead, ASML expects fourth-quarter net sales of around 2.1 billion euros and a gross margin around 44 percent.

Further, the company noted that its existing share buyback program will not be completed for the full amount due to a pause in the program from July 20, 2016 until July 19, 2017.

ASML in January 2016 had announced its intention to purchase up to 1.5 billion euros of shares to be executed within the 2016-2017 time frame. Through October 1, 2017, ASML has acquired 6.0 million shares for 569 million euros.

The company said the current program may be suspended, modified or discontinued at any time.

In Amsterdam, ASML shares closed Tuesday's trading at 148.50 euros, down 0.34 percent.