ASML Q1 2024 Earnings Report

• Net sales: 5.29 billion euros ($5.62 billion) versus 5.39 billion euros expected.
• Net profit: 1.22 billion euros, compared to 1.07 billion euros expected.

Net sales decreased by 21.6% year-on-year while net income decreased by 37.4%. ASML's net sales fell in the middle of the company's guidance.

Net bookings for ASML machines, a closely watched booking, were €3.6 billion in the first quarter, down 4% year-on-year but down by about two-thirds compared to the December quarter.

ASML is one of the world's most important semiconductor companies, producing tools known as extreme UV lithography machines, which are needed to manufacture the world's most advanced chips.

Last year, weak demand for consumer electronics such as smartphones and laptops hit chipmakers that produce semiconductors for those devices. This, in turn, led to a slight weakening in demand for ASML equipment.

However, many semiconductor companies across the board, such as memory chip maker Samsung, are seeing a rebound in demand.

ASML previously said it expects 2024 net sales to be similar to 2023 and reiterated that forecast on Monday. ASML reported net sales of €27.6 billion in 2023.

“Our full-year 2024 outlook remains unchanged, and the second half of the year is expected to be stronger than the first half, in line with the industry’s continued recovery from the downturn,” ASML CEO Peter Wennink said in a statement.

“We see 2024 as a transitional year with continued investments in both increased capacity and technology, to be ready for the turn of the cycle.”

ASML equipment is purchased by the world's largest chip manufacturers, such as Taiwan Semiconductor Manufacturing Company, Samsung and Intel.

Part of ASML's bullish trend comes from the fact that Samsung, TSMC and Intel are working to increase production capacity in America, supported by funding from the US Chip and Science Act.

“I think by 2025, you'll see those three elements coming together. New openings, strong secular trends and an industry in the midst of its ascent,” Roger Dassin, ASML's chief financial officer, said in a pre-recorded video interview. .

ASML has not yet addressed any impact from export restrictions to China in the first quarter.

Following US pressure, the Dutch government last year imposed restrictions in June on the export of advanced semiconductor equipment – ​​including ASML machines.

However, sales of its systems to China accounted for 49% of the total in the first quarter, up from 39% in the fourth quarter of 2023, the company said in a document issued alongside its results.

ASML previously said export restrictions would affect 10% to 15% of China sales this year.