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ASML Shares Edge Lower After Annual Revenue Outlook Downgraded

Stock Markets Jul 20, 2022 09:00
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By Scott Kanowsky

Investing.com -- ASML Holding NV (AS:ASML) has lowered its full-year sales growth outlook, as the Dutch semiconductor manufacturer warned of delayed shipment revenues and an uptick in costs.

The company said it now expects annual sales to increase by around 10%, down from the previous guidance of 20%.

In a statement, president and chief executive officer Peter Wennink added that ASML plans to ship a record number of semiconductor systems this year, thanks in part to strong demand in the automotive, high-performance computing, and green energy sectors. However, supply chain constraints led to a delay in these shipments, Wennink said.

As a result, ASML will increase its amount of "fast shipments" - or a process that skips some in-factory testing in favor of doing last-stage approval at a client's site. The move gives customers earlier access to chips, but pushes back ASML's recognition of the sale until the product receives final acceptance.

Wennink said revenue from these shipments this year will, in turn, increase to around €2.8B from €1B - but will not be recognized on the company's books until 2023.

"With the combination of this delayed revenue recognition, the extra costs related to the planned increase in output capacity and certain inflationary trends, we expect the full year 2022 gross margin to be between 49% and 50%," Wennink said.

In its second quarter, ASML reported a new high in net bookings of €8.5B, which helped the Veldhoven-based firm post better than expected earnings per share of €3.54 and net sales of €5.43B during the period.

Amsterdam-listed shares in ASML were slightly lower in early trading on Wednesday.

ASML Shares Edge Lower After Annual Revenue Outlook Downgraded
 

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