ASML Q4 Profit Up, Sees Solid Growth In FY18, Plans Share Buyback; Names New CFO

(RTTNews) - Dutch semiconductor equipment maker ASML Holding NV (ASML) reported Wednesday higher profit and sales in its fourth quarter with increased system sales, despite weak gross margin. Going ahead, the company projects continued solid growth of sales and profitability in 2018.

Further, ASML announced 2018-2019 share buyback program for up to 2.5 billion euros and also proposed 17 percent dividend increase to 1.40 euros per share. Separately, ASML said its Supervisory Board intends to appoint Roger Dassen as Executive Vice President and Chief Financial Officer, effective June 1. Dassen, aged 52, succeeds Wolfgang Nickl who will leave ASML at the end of April.

Commenting on the results, ASML President and Chief Executive Officer Peter Wennink said, "Due to industry strength, some customers requested earlier shipments of their lithography systems, which we were able to accommodate. Earlier-than-expected revenue recognition of two Extreme Ultraviolet (EUV) systems contributed to the strong performance in the fourth quarter as well..... For 2018 we expect continued solid growth of sales and profitability."

For the fourth quarter, net income, on IFRS basis, was 713.9 million euros, up from 530.2 million euros last year. On US GAAP basis, net income increased to 643.0 million euros from the prior year's 524.2 million euros, with earnings per share improving to 1.49 euros from 1.22 euros last year.

Net sales for the fourth quarter grew to 2.56 billion euros from 1.91 billion euros last year. Net system sales improved to 1.95 billion euros from last year's 1.29 billion euros. Net service and field option sales, meanwhile, dropped to 605.5 million euros from 618.3 million euros a year ago.

Gross margin for the quarter was 45.2 percent, down from 47.2 percent a year ago. Operating margin, however, grew to 29.3 percent from 27.8 percent last year.

Sales of lithography systems climbed to 57 units from prior year's 38 units. Value of systems backlog was 6.69 billion euros, significantly higher than 3.96 billion euros a year ago.

Lithography systems backlog climbed to 140 units from 83 units last year. Value of booked systems grew to 2.94 billion euros from 1.58 billion euros a year ago. Net bookings lithography systems grew to 75 units from 44 units in the previous year.

Looking ahead, for the first quarter, ASML expects net sales around 2.2 billion euros, and a gross margin between 47 and 48 percent.

Further, ASML said it will submit a proposal to the 2018 Annual General Meeting of Shareholders to declare a dividend in respect of 2017 of 1.40 euros per ordinary share, for a total amount of approximately 600 million euros, compared to last year's 1.20 euros.

Regarding the CFO appointment, the company said the appointment is subject to notification of the Annual General Meeting of Shareholders scheduled for April 25.

Dassen is the Global Vice Chairman, Risk, Regulatory, and Public Policy of Deloitte Touche Tohmatsu Limited. In this capacity, he also serves as the Global Chief Ethics Officer and a member of the DTTL Executive. Dassen is a former CEO of Deloitte Netherlands.

In Amsterdam, ASML shares settled at 153.65 euros on Tuesday, up 1.22 percent.