ASML Q3 Profit Down Despite Higher Revenues; Confirms Forecast

(RTTNews) - Dutch semiconductor equipment maker ASML Holding NV (ASML) reported Wednesday a decline in the third-quarter profit reflecting higher costs and lower margin. However, net sales were benefited by growth in average selling prices, despite lower unit sales. Looking ahead, the company projects sequentially higher net sales in its fourth quarter, and backed fiscal 2013 outlook.

ASML projects first-half 2014 sales to be at similar levels to the second-half 2013, excluding Extreme Ultraviolet or EUV. President and Chief Executive Officer Peter Wennink said, "As expected, we have seen healthy bookings for our advanced products from memory customers, driven by DRAM technology upgrades and additional NAND capacity. Therefore, we see demand in the first half of 2014 at a level consistent with our H2 2013 net sales, excluding additional Extreme Ultraviolet (EUV) system sales which are incremental until insertion into volume production."

For the third quarter, the company's net income, on a U.S. GAAP basis, declined to 193.1 million euros from 274.7 million euros a year ago. Earnings per share fell to 0.43 euro from 0.65 euro last year.

On IFRS basis, quarterly net income declined to 248.1 million euros from 322.6 million euros, reported a year back.

Total net sales, however, grew to 1.32 billion euros from last year's 1.23 billion euros. In the quarter, a decline in net system sales was more than offset by net service and field option sales.

Income from operations fell 33.2 percent, reflecting significantly higher costs from research and development as well as selling, general and administrative costs.

Gross margin fell to 40.3 percent from 43.2 percent a year ago, and operating margin dropped to 16.1 percent from 25.8 percent last year.

In the quarter, the company sold 34 systems, lower than last year's 40 units. Average selling price of system sales, however, grew to 28.2 million euros from 25.0 million euros a year earlier.

Value of systems backlog excluding EUV climbed to 1.84 billion euros from 1.34 billion euros in the prior year.

ASML said its systems backlog excluding EUV as well as average selling price of systems backlog increased from last year. The company also recorded growth in value of booked systems, net bookings as well as average selling price- all excluding EUV.

Looking ahead, for the fourth quarter, ASML expects net sales of around 1.8 billion euros, and gross margin between 43 and 44 percent, including accounting impact from Cymer acquisition. Further, the company confirmed its fiscal 2013 net sales forecast of up to 5.2 billion euros, including Cymer.

The company also said it remains on target to deliver systems with a throughput of 70 wafers per hour next year, upgradeable to 125 wafers per hour in 2015.

In Amsterdam, ASML shares closed Tuesday's trading at 72.11 euros, up 0.79 euros or 1.11 percent.