Semiconductor equipment leader ASML on Wednesday beat expectations for the fourth quarter but gave a cautious outlook for the year ahead. ASML stock rose on the news.
The Netherlands-based company earned the equivalent of $5.64 a share on sales of $7.84 billion in the December quarter. ASML reports financial results in euros. Analysts polled by FactSet had expected ASML earnings of $5.16 a share on sales of $7.43 billion. In the year-earlier period, ASML earned $5.02 a share on sales of $7.01 billion, FactSet said.
For the current quarter, ASML predicted sales of $5.72 billion, based on the midpoint of its guidance. Analysts had been looking for $6.78 billion in the first quarter.
"The semiconductor industry continues to work through the bottom of the cycle," Chief Executive Peter Wennink said in a written statement. "Although our customers are still not certain about the shape of the semiconductor market recovery this year, there are some positive signs."
Chip inventory levels are improving, he said. Plus, ASML saw strong orders in the fourth quarter.
ASML Stock Climbs After Report
"In spite of the positive signs … we maintain our conservative view for the total year and expect 2024 revenue to be similar to 2023," Wennink said. "We also expect 2024 to be an important year to prepare for significant growth that we expect for 2025."
The Dutch company makes advanced lithography equipment for etching tiny circuits onto semiconductors.
On the stock market today, ASML stock jumped 8.9% to close at 847.31.
On Dec. 5, ASML stock broke out of a cup-with-handle base at a buy point of 696.97, according to IBD MarketSmith charts.
Bookings Growth A Nice Surprise
Wells Fargo analyst Joe Quatrochi said ASML delivered a surprise reacceleration of bookings in the fourth quarter. That bodes well for demand and 2025 business after an expected flat 2024, he said.
Fourth-quarter bookings were a record 9.2 billion euros ($10 billion), vs. estimates for 3 billion euros ($3.27 billion), he said.
Quatrochi rates ASML stock as overweight, or buy, with a price target of 855.
ASML stock is on three IBD lists: Big Cap 20, Global Leaders and Tech Leaders.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
