HomeBusinessWhy ASML Stock Dive Today

Why ASML Stock Dive Today

Shares of ASML (NASDAQ: ASML) fell today after the leading maker of semiconductor lithography equipment accidentally released its earnings results ahead of schedule this morning and disappointed the market with the news.

As a result, the stock fell 16.4% as of 12:01 a.m. ET.

A lithography machine that makes a semiconductor.

Image source: Getty Images.

ASML reverses its forecast for 2025

ASML delivered solid results in the third quarter with revenues of 7.47 billion euros, equal to $8.14 billion, ahead of estimates of $7.82 billion.

That figure represents 11.2% growth from the year-ago quarter, and 19.6% growth from the second quarter, showing the company is recovering from an earlier lull in purchasing, in anticipation of an expected increase into next year.

The company sold 106 lithography systems in the quarter, up from 89 in the second quarter, and reported solid growth on the bottom line: earnings per share (EPS) rose to 5.28 euros, compared to 4.01 euros in the second quarter . That translated to earnings per share of $5.75, up from $5.27 in the year-ago quarter and ahead of estimates of $5.33.

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CEO Christophe Fouquet said net sales in the quarter were above expectations, “driven by more DUV [deep ultraviolet machines] and the sale of Installed Base Management.” The installed base management segment mainly concerns service.

However, the company has reversed its 2025 forecast, as Fouquet said:

While there is still strong development and upside potential in AI, other market segments are taking longer to recover. It now appears that the recovery is more gradual than previously expected. This is expected to continue into 2025, causing caution among customers.

What it means for ASML

That delay appears to reflect the challenges faced by customers, among others Intel and Samsung, both of which have recently slowed their foundry investments.

The company expected a turnover of 8.8 to 9.2 billion euros for the fourth quarter, but the forecast for 2025 of 30 to 35 billion euros was below consensus at 36.3 billion euros.

That forecast understandably disappointed investors, although it reflects market conditions rather than ASML’s competitive position. Considering this, this looks like a buying opportunity for patient investors.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML. The Motley Fool recommends Intel and recommends the following options: Short November 2024 $24 Calls on Intel. The Motley Fool has a disclosure policy.

Why ASML Stock Was Plunging Today was originally published by The Motley Fool

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