ASML Q2 Profit Down, Sales Rise; Sees Higher Sales In FY16

(RTTNews) - Dutch semiconductor equipment maker ASML Holding NV (ASML) reported Wednesday a decline in the second-quarter profit on weak margin. However, net sales increased on higher system sales, despite lower pricing.

Looking ahead, the company expects sequentially higher margin and lower sales in its third quarter. It also expects full-year 2016 sales to exceed 2015 record year.

ASML's net income for the second quarter 2016 declined to 353.8 million euros from last year's 369.7 million euros. Earnings per share decreased to 0.83 euros from 0.85 euros in the prior year.

Income from operations were 404.2 million euros, lower than last year's 418.9 million euros. Income from operations margin declined to 23.2 percent from 25.3 percent a year ago.

Gross margin, as a percentage of net sales, was 42.6 percent, lower than 45.6 percent a year ago.

Quarterly net sales, however, increased to 1.74 billion euros from 1.65 billion euros last year. Net system sales were 1.254 billion euros, higher than 1.135 billion euros a year ago.

Net service and field option sales declined to 485.5 million euros from 519.6 million euros in the previous year.

In the quarter, the company's sales of systems totaled 46 units, higher than 41 units last year. Average selling price of system sales, meanwhile, declined to 27.3 million euros from 27.7 million euros last year.

ASML President and Chief Executive Officer Peter Wennink said, "System sales were weighted towards logic customers, supporting the initial ramp of the 10 nanometer node. System sales to memory customers remained healthy, as manufacturers continued their technology investments in DRAM and added capacity for 3D NAND."

Net bookings were 43 units, down from 46 units last year. The company recorded second-quarter orders of 1.57 billion euros, higher than 1.52 billion euros a year ago, with increase in average selling price.

Systems backlog was 73 units, down from 81 units last year. The value of systems backlog grew to 3.37 billion euros from 3.02 billion euros in the prior year.

Looking ahead, for the third quarter, ASML expects net sales at approximately 1.7 billion euros and a gross margin of around 47 percent.

For the full year, the total net sales level will depend on the timing of EUV revenue recognition and the size of the combined 10/7 nanometer node ramp.

Further, ASML said it models an annual revenue opportunity of 10 billion euros by 2020. With the significant leverage in financial model, the company believes this will allow a potential tripling of earnings per share by the end of this decade, compared to calendar year 2014.

In Amsterdam, ASML shares are currently trading at 95.59 euros, up 1.13 percent.

On Nasdaq, ASML shares settled at $105.63 on Tuesday, up 2.42 percent.