ASML (NASDAQ:ASML) said its profits and orders fell in the third quarter and warned that 2024 is likely to see flat sales during "a transition year".
The supplier of equipment to semiconductor manufacturers reported a 2.5% fall in net income to €1.94 billion, which was in line with analysts' forecasts.
Net sales declined 3.3% to €6.7 billion, as guided, but bookings slumped 42% to €2.6 billion.
"The semiconductor industry is currently working through the bottom of the cycle and our customers expect the inflection point to be visible by the end of this year," said chief executive Peter Wennink.
"Customers continue to be uncertain about the shape of the demand recovery in the industry. We therefore expect 2024 to be a transition year."
He said management currently are taking "a more conservative view and expect a revenue number similar to 2023", saying 2024 will be "an important year to prepare for significant growth that we expect for 2025".
Analyst Derren Nathan at Hargreaves Lansdown said the results were "solid" against a challenging backdrop.
On the flat guidance for the year ahead, he said: "One interpretation might be higher costs so there could be some downgrades to forecasts off the back of this."
ASML also took its foot off the buyback pedal, repurchasing €100 million of shares compared to €500 million in the prior quarter and €11 billion returned to shareholders in the last two years.
Nathan said this suggested management may be battening down the hatches and preparing to rebuild the balance sheet.
"With a rating above its long-term average, there is likely to be some indigestion amongst investors as growth looks set to stall next year,” Nathan said.
The shares fell 4% in early trading in Amsterdam, and in US pre-market trading of its NASDAQ listing, the shares are down 1.7% at $598.19.