Semiconductor equipment maker ASML on Wednesday beat analyst expectations for earnings in the fourth quarter but missed on sales. ASML stock wavered on the news.
The Dutch company earned the equivalent of $5.02 a share on sales of $5.7 billion in the December quarter. Analysts expected ASML earnings of $4.25 a share on sales of $5.85 billion, according to FactSet. In the year-earlier period, ASML earned $3.91 a share on sales of $5.15 billion. ASML reports financial results in euros.
For the current quarter, ASML forecast sales of $3.86 billion, based on the midpoint of its outlook. Analysts were looking for first-quarter sales of $6.07 billion, FactSet said.
The much-lower-than-expected sales guidance for the first quarter is mostly related to delayed revenue recognition for certain systems delivered under the company's "fast shipment program," analysts said. Those sales will be recognized in the second and third quarters.
The first-quarter sales outlook also was impacted by a Jan. 2 fire at its factory in Berlin. The fire damaged an area that produces the wafer clamp, a module in its extreme ultraviolet lithography systems.
ASML Stock Rises On Earnings Report
ASML expects 2022 sales growth of around 20% compared with 2021. Wall Street analysts had predicted 17% sales growth for 2022.
On the stock market today, ASML stock climbed as much as 3.3% before turning south with the broader market. ASML stock ended the regular trading session down 2.3% to 698.82.
Because of high customer demand for its equipment, ASML is shipping many systems before final testing and formal acceptance, ASML Chief Executive Peter Wennink said in a news release. That testing and acceptance is occurring at the customer site instead of an ASML factory, he said.
"This leads to a deferral of revenue recognition for those shipments until formal customer acceptance, but does provide our customers with earlier access to wafer output capacity," he said.
Netherlands-based ASML makes advanced lithography equipment for etching tiny circuits onto semiconductors.
ASML Report Called 'Mixed Bag'
ASML's strong outlook for 2022 should counter the company's disappointing sales guidance for the current quarter, Wells Fargo analyst Joe Quatrochi said in a note to clients. He rates ASML stock as overweight, or buy.
Cowen analyst Krish Sankar said ASML's results and guidance were "a mixed bag." Still, he remains upbeat on ASML's prospects. Sankar rates ASML stock as outperform.
ASML stock ranks No. 14 out of 32 stocks in IBD's semiconductor equipment industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 94 out of 99. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
The semiconductor equipment group ranks No. 29 out of 197 industry groups that IBD tracks.
ASML stock also is in the IBD Long-Term Leaders Portfolio.
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