Dutch semiconductor equipment giant ASML saw its shares tumble on Tuesday after its third-quarter earnings were accidentally released ahead of schedule.
Shares of ASML Holding, trading in Amsterdam, closed 15.7% lower, marking their steepest one-day decline since going public in January 2002.
The early release of ASML's third-quarter earnings revealed a downward revision to the company's 2025 sales outlook, sparking investor concern and triggering a broader sell-off across the semiconductor sector.
2025 outlook revised: Customer caution and slower recovery
The biggest European chipmaker company lowered its 2025 net sales forecast to a range of €30 billion to €35 billion, down from the previous guidance of €30 billion to €40 billion provided at its 2022 Investor Day.
This more conservative outlook, particularly due to delays in EUV (extreme ultraviolet lithography) demand, spooked investors and sent shockwaves through the market.
ASML's reduced guidance on 2025 net sales stems from a combination of market factors.
"While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover," said Christophe Fouquet, ASML’s President and Chief Executive Officer.
He noted that the slower-than-expected recovery in logic chips, coupled with limited capacity additions in memory chip production, has led to delays in demand for EUV equipment, a key growth area for the company.
ASML remains optimistic about long-term growth drivers, with Fouquet pointing to continued strength in AI, electrification, and energy transition trends.
Q3 earnings highlights: Sales and margin expectations for 2024 remain robust
For Q3 2024, ASML posted €7.5 billion in total net sales and €2.1 billion in net income, supported by a gross margin of 50.8%. The results were generally in line with forecasts, with analysts having anticipated Q3 sales of €7.12 billion.
Looking ahead to the final quarter of 2024, ASML expects net sales of between €8.8 billion and €9.2 billion, with a gross margin between 49% and 50%. The company reiterated its full-year sales target of around €28 billion for 2024.
ASML also provided an update on its dividend and share buyback program. The company announced that an interim dividend of €1.52 per ordinary share will be payable on 7 November 2024. However, no shares were repurchased during the third quarter under the ongoing 2022-2025 share buyback program.
Semiconductor stocks takes a dive
ASML's sharp decline spread to other chipmaker stocks on Tuesday, with shares of Nvidia Corp. tumbling more than 5% in New York trading, and Arm Holdings plc dropping over 7%.
The broader semiconductor sector, tracked by the iShares Semiconductor ETF, fell by over 4%, while the tech-heavy Nasdaq 100 index dipped more than 1% amidst the sell-off.
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