ASML, the Dutch semiconductor equipment maker, is set to report its earnings next week after its stock has been on a bull run.
One of the world's largest suppliers of advanced semiconductor equipment, ASML investors have reasons for optimism after the firm’s Nasdaq-listed shares have gained nearly 21% year-to-date.
ASML is the only equipment company that is expected to generate strong double-digit revenue and earnings growth in both 2023 and 2024, analysts at Zacks have noted.
For its first quarter, ASML expects revenue of between €6.1 billion to €6.5 billion, according to estimates.
That figure includes €1.5 billion in revenues generated by its already-installed base of lithography machines, Derren Nathan, head of equity research at Hargreaves Lansdown noted.
“Despite difficulties in the wider semiconductor market, ASML’s virtual monopoly over certain types of advanced equipment for chip manufacturers helped the group continue to grow sales last year,” Nathan wrote.
“However, margins were held back by factors including increased operating and research and development costs. Next week’s first quarter results should give some colour as to where margins are heading in 2023.”
ASML has seen a 67% jump in order backlog to $40.4 billion – enough to give it the confidence to expect 25% sales growth for the year, according to Nathan.
“Whilst it doesn’t make chips itself, we’ll be looking to see whether scaled back production plans by troubled industry players such as Samsung have impacted the company’s outlook,” Nathan wrote.
The Hargreaves Lansdown analyst did note that investors are hoping to get clarity over the impact of additional Dutch export bans on certain of ASML’s product lines to China, which made up nearly 14% of total revenues last year.
ASML is set to report its results on Wednesday, April 19 before the market opens.
Contact Angela at angela@proactiveinvestors.com
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