ASML Third-Quarter Profit Declines 30% on Higher Expenses
Net income fell to 193.1 million euros ($261 million) from 274.7 million euros a year earlier, Veldhoven, Netherlands-based ASML said today. Analysts projected 192 million euros, the average of estimates compiled by Bloomberg. Sales rose 7.3 percent to 1.32 billion euros, including the takeover of light-source manufacturer Cymer Inc. completed in May.
The Cymer purchase is part of ASML’s push into newer technologies as sales of personal computers fall and chip production is shifting toward mobile phones and tablets. The shift weighed on profitability, alarming investors after ASML shares more than tripled in the past three years.
The shares fell 1 percent to 71.40 euros at 9:49 a.m. in Amsterdam, valuing the company at 31.9 billion euros. It had climbed 50 percent this year through yesterday, making it the third-best performing stock in the AEX index this year.
Third-quarter gross margin shrank to 40.3 percent from 43.2 percent a year earlier. In the fourth quarter, it’ll rebound to 43 percent to 44 percent, ASML predicted. The company confirmed its full-year sales forecast of as much as 5.2 billion euros.
ASML expanded into the so-called extreme ultraviolet lithography technology, or EUV, through the Cymer acquisition. EUV technology is important for the chipmaking industry to enable the production of smaller chips while increasing their capacity and speed for devices such as handsets and tablets.
Last week, Micron Technology Inc. (MU), one of ASML’s main memory customers, reported fourth-quarter sales that exceeded analysts’ estimates as higher average prices helped make up for lackluster personal-computer demand.
“We will see the translation of the increased memory orders into our shipments starting in the fourth quarter but also in the first two quarters of 2014,” ASML Chief Executive Officer Peter Wennink said in an online video statement. “We expect that the first two quarters of 2014 will be comparable to our sales in the second half of 2013.”
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