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ASML’s Anticipated Second-Quarter Earnings Report

Stay updated on ASML’s highly anticipated second-quarter earnings report. Discover key financial insights, performance metrics, and market impact in this comprehensive analysis.

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ASML, a leading semiconductor equipment manufacturer, is set to announce its second-quarter earnings on July 17, 2024. The company is a key supplier to major chipmakers like TSMC, Samsung, and Intel, providing chips for computers and smartphones. Amid the current AI wave, ASML’s stock has surged by 45% year-to-date, outperforming the Euro Stoxx 600 benchmark’s 8% growth.

Key Metrics Driving ASML’s Earnings

One of the crucial factors influencing ASML’s quarterly results is its relationship with TSMC, a key customer and major Apple supplier. The timing and volume of TSMC’s orders significantly impact ASML’s bookings. Analysts predict a notable increase in net machinery bookings of €5.04 billion for the second quarter, representing a 12% rise from the same period last year.

While bookings are expected to strengthen, net sales are projected to decline by 12% to €6.08 billion compared to the previous year. This follows a similar drop in the first quarter, where ASML experienced a decrease in both net sales and net income.

Implications of Sales in China

ASML’s sales performance in China plays a critical role in its quarterly outcomes. The company’s revenue in China was boosted in the first quarter, primarily driven by sales of certain products not affected by US restrictions. However, with China reporting weaker-than-expected GDP figures for the second quarter, concerns linger regarding the sustainability of this growth.

Service Revenue Outlook

Aside from hardware sales, ASML’s service division contributes significantly to its revenue, accounting for around 25% of total earnings. The service segment encompasses equipment maintenance, servicing, and upgrades. The adoption of advanced technologies like Extreme Ultraviolet (EUV) lithography is expected to bolster the company’s service revenue in the upcoming quarter.

ASML’s leadership remains optimistic about the company’s future prospects. CEO Peter Wennink highlighted a steady outlook for the full year of 2024, with expectations of a stronger performance in the second half. CFO Roger Dassen also expressed confidence in the company’s outlook for 2025, emphasizing a positive trajectory for ASML’s operations and services.

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