(News Bulletin 247) – The specialist in vital technologies for semiconductors recorded orders that were much lower than expected by analysts. The stock fell despite better-than-expected earnings per share.

Less known than LVMH and Novo Nordisk, at least among the general public, the Dutch ASML is quite simply the third largest company on the stock market in Europe. Mega-champion of the Amsterdam market, its valuation is close to 350 billion euros, and its price has increased by almost 400% over five years thanks to its vigorous growth.

If ASML is linked to the world of semiconductors, the Batavian company does not produce chips strictly speaking. ASML designs machines used for photolithography, an essential technology for creating semiconductors. As Morningstar explains, it’s a “process in which a light source is used to expose the patterns of an integrated circuit on a silicon wafer from a photomask.”

The Dutch group’s products are thus purchased by the main semiconductor players such as Samsung Electronic, Intel and the Taiwanese foundry TSMC.

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Orders too fair

With the surge in semiconductor applications (due for example to the rise of 5G or the development of connected objects) demand has obviously increased significantly for ASML. In 2023, its sales increased by 30% to 6.4 billion euros.

However, semiconductors remain an industry where orders can be very volatile from one quarter to the next. The first quarter accounts, published this Wednesday by the Dutch group, illustrate this well.

The main highlight comes from commercial activity. ASML’s order intake only stood at 3.6 billion euros, much less than the approximately 5.1 billion euros expected by the consensus cited by Oddo BHF.

More specifically, ASML reported 656 million euros in orders for “EUV” (extreme ultraviolet radiation) lithography tools, the company’s new generation of products. According to the Atomic Energy Commission (CEA), this process makes it possible to trace finer patterns to process ever more information, with a reduced wavelength. And therefore ultimately enable the production of more powerful chips.

Slightly weak prospects

Stifel notes that these order intakes in “EUV” technologies were particularly low since they stood at more than 5.5 billion euros in the previous quarter and that the consensus was counting on an amount of 1.68 billion euros. euros.

Enough, according to Oddo BHF, to be sanctioned by the market, which is indeed the case. ASML fell 3.9% on the Amsterdam Stock Exchange around 3:10 p.m.

“This does not change the story. This publication reminds us that orders can be irregular, particularly when they depend on a limited number of customers (TSMC seems to be in “wait and see” mode), however Oddo qualifies. BHF.

The rest of ASML’s publication is mixed. At 5.29 billion euros, first quarter revenues were a bit below expectations, which amounted to 5.42 billion euros. However, notes Oddo BHF, the group’s gross margin exceeded expectations, at 51%, compared to 48.8% expected, as did earnings per share, at 3.11 euros (compared to a consensus of 2.83 euros). .

For the second quarter, ASML indicated that it expects sales of between 5.7 billion euros and 6.2 billion euros and a gross margin of between 50% and 51%. A projection described as “weak” by Stifel, to the extent that the consensus anticipated revenues of around 6.5 billion euros for this period.

For the whole of 2024, ASML has maintained its outlook for sales similar to that of 2023, with a second half which will be more robust than the first as for the entire semiconductor sector.

Bank of America is confident in these objectives, and has confirmed its purchase opinion as well as the group’s placement in its “top picks”, its preferred stocks.

“We remain confident in ASML’s positioning and long-term potential, as the company remains an unrivaled story of technological dominance and structural growth in the industry,” adds Oddo BHF, which has an “outperform” advisory. on value.