ASML Profit Beats Analyst Estimates as Chip Customers Increase Spending

ASML Holding NV, Europe’s biggest maker of semiconductor equipment, reported second-quarter profit that beat analysts’ predictions and forecast that 2010 sales will rise to a record level as chip companies boost spending.

Sales may be 10 percent to 15 percent higher than the record in 2007 of 3.8 billion euros ($4.9 billion), ASML said today. The Dutch company said in April that revenue would “surpass” the 2007 figure. Sales volume in the fourth quarter will continue into the first quarter of next year, it said today.

ASML, the maker of machines that produce chips for Apple Inc.’s iPods and Nokia Oyj’s mobile phones, is benefitting from increased demand for equipment to make memory chips. Intel Corp., the world’s biggest chipmaker, yesterday raised its profit forecast for the year to a record after businesses resumed spending on computers.

“Semiconductor makers are lining up at ASML’s doors as they can’t keep up with demand,” Jos Versteeg, an Amsterdam- based analyst at Theodoor Gilissen Bankiers, said in a phone interview. ASML’s outlook “eases concerns of a potential cooling down towards the end of the year. They clearly say demand will continue in 2011,” he said.

ASML rose 3.1 percent to 25.15 euros in Amsterdam trading, the biggest gain in more than a month.

Expanding Factory Lines

Companies including Samsung Electronics Co. are expanding factory lines to meet rising demand for personal-computer memory and chips used to store data in portable devices such as Apple’s iPhone.

Intel, whose processors run more than 80 percent of the world’s personal computers, said yesterday it expects about $5.2 billion in full-year capital spending, up from an earlier prediction of about $4.4 billion.

ASML’s second-quarter net income was 239 million euros, compared with a net loss of 104 million euros a year earlier, the Veldhoven, Netherlands-based company said. That beat the 203 million-euro average of 15 analysts’ estimates compiled by Bloomberg.

“For the first time in years we are seeing customers announcing new factories, and those factories need the full suite of our products,” ASML Chief Financial Officer Peter Wennink said in a video on the company’s website.

Second-quarter sales rose to 1.07 billion euros from 277 million euros a year earlier, beating the 1.01 billion-euro average estimate of 23 analysts surveyed by Bloomberg.

More Orders

ASML received 1.18 billion euros of orders for 59 machines in the second quarter, up from 15 machines a year earlier. The average selling price for ordered machines fell to 20 million euros from 26.3 million euros a year earlier. The company expects bookings valued at about 1.3 billion euros for the third quarter.

“These are excellent results,” said Tijs Hollestelle, an Amsterdam-based analyst at ING Groep NV with a “hold” recommendation on the shares. “Second-quarter bookings and third-quarter order guidance were better than expected, so that provides a lot of comfort.”

Global semiconductor capital equipment spending will more than double to $35.4 billion this year from $16.6 billion in 2009, researcher Gartner Inc. said June 10. Capital equipment spending growth may slow to 6.6 percent in 2011 as “the industry focuses on macroeconomic conditions,” the Stamford, Connecticut-based researcher said.

U.S. Business

The U.S. accounted for 24 percent of the order backlog at the end of the second quarter, up from 19 percent at the end of March, ASML said. Intel and other so-called integrated design manufacturers accounted for 28 percent of the backlog as of June 27.

“We made progress with every one of our customers” in the U.S., Chief Executive Officer Eric Meurice told analysts in a conference call, declining to give names.

The increase in orders from the U.S. “likely means Intel placed orders for 22 nanometer machines,” which can produce circuits of that measurement, said Peter Olofsen, an Amsterdam- based analyst at Kepler Capital Markets. Olofsen has a “hold” recommendation on the shares.

ASML is the world’s largest maker of machines to project lines on the silicon slices from which chips are made. Its main rival is Nikon Corp. of Japan. Applied Materials Inc., based in Santa Clara, California, is the world’s largest maker of semiconductor equipment.

To contact the reporter on this story: Maud van Gaal in Amsterdam at mvangaal@bloomberg.net

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