Semiconductor equipment supplier ASML on Wednesday beat Wall Street's targets for the third quarter but gave cautious guidance. Still, ASML stock surged on the news.
The Netherlands-based company earned the equivalent of $4.23 a share on sales of $5.69 billion in the September quarter. Analysts polled by FactSet expected ASML earnings of $3.75 a share on sales of $5.49 billion. In the year-earlier period, ASML earned $4.97 a share on sales of $6.1 billion. ASML reports financial results in euros.
For the current quarter, ASML forecast revenue of $6.23 billion, based on the midpoint of its outlook. Wall Street had predicted $6.375 billion. In the fourth quarter last year, ASML generated $5.66 billion in sales.
The Dutch company makes advanced lithography equipment for etching tiny circuits onto semiconductors.
ASML Stock Rises After Report
On the stock market today, ASML stock jumped 6.3% to close at 424.02.
"There is uncertainty in the market due to a number of global macro-economic concerns including inflation, consumer confidence and the risk of a recession," Chief Executive Peter Wennink said in a news release. "While we are starting to see diverging demand dynamics per market segment, the overall demand for our systems continues to be strong."
Further, ASML expects limited impact on its business from U.S. export control regulations targeting China, Wennick said.
Well Positioned In Market
U.S. bans on exports of advanced chip technology to China likely will continue to weigh on ASML stock, Josep Bori, thematic research director at GlobalData, said in a note to clients. Still, the company's performance is commendable, he said.
"Despite revenue growth decelerating in Q3 and somewhat soft guidance for Q4, the company remains very well positioned," Bori said. "Further, its demand remains robust, and the net bookings growth of 44% year over year bodes well for future sales."
ASML stock ranks No. 11 out of 29 stocks in IBD's semiconductor equipment industry group, according to IBD Stock Checkup. It has a subpar IBD Composite Rating of 43 out of 99.
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