[Eco-Investing] Stock + 8%! 2023 record profits! Eyes on ASML
Europe’s largest company by market capitalization to post record profits in 2023…Nasdaq +8%!
Slow growth in China…what’s next?
ASML, a Dutch group and Europe’s largest technology company by market capitalization, posted a net profit of €9.2 billion for the three months ended December 31. That’s more than triple the total it posted in the previous quarter.
Net income rose 9% to €2.05 billion, beating estimates of €1.87 billion, according to LSEG data cited by Reuters.
After reporting these record quarterly orders and better-than-expected fourth-quarter earnings, ASML U.S. Nasdaq-listed shares rose 8.85% on Wednesday.
“Strong orders clearly support future sales”
Contributing to ASML’s net income was its deep ultraviolet lithography and advanced extreme ultraviolet lithography equipment used in semiconductor chip manufacturing.
CEO Peter Wennink said in a statement that strong orders clearly support future sales. However, he was cautious, saying he expects fiscal year 2024 to see similar revenue growth to the past 12 months.
His cautiousness had to do with the future of the semiconductor industry. “The semiconductor industry continues to move through the bottom of the economic cycle,” Wennink said. “Our customers are still not sure what form the recovery in the semiconductor market will take this year, but there are some positive signs,” he said, predicting a positive future amid the uncertainty.
China sales expected to decline…why?
Contrary to the gains in the US stock market, ASML’s performance in China is expected to decline. “U.S. and Dutch restrictions on exports to China are expected to reduce revenue by 15% in 2024 in China, ASML’s third most important market,” said Roger Dassen, chief financial officer.
The United States and the Netherlands have recently taken steps to restrict Chinese semiconductor manufacturers’ access to key chip-making tools to curb the development of technologies that could enhance China’s military capabilities.
ASML continues to be on a roll
“We are growing increasingly enthusiastic about ASML’s strong order book this year,” analysts at Morgan Stanley wrote in a note to clients, “which we expect to benefit revenue in 2025.”
ASML Holdings is a Dutch multinational founded in 1984. It specializes in the development and manufacture of photolithography machines used in the production of computer chips.
In 2023, it will still be the largest supplier to the semiconductor industry and the world’s only supplier of extreme ultraviolet lithography photolithography machines, which are required for the manufacture of state-of-the-art chips. ASML’s market capitalization is among the highest in Europe.
