ASML Shares Rise After Strong Earnings Report

The semiconductor equipment maker sees profits and bookings rise in Q2 but lowers full-year forecasts. We dive into its earnings release.

ASML Holding NV (NASDAQ: ASML) saw its shares rise by 3.22% after its earnings release yesterday, announcing positive second-quarter results. However, the company has lowered its full-year guidance due to delayed revenue, inflationary pressure, and slowing customer demand in consumer-driven markets.

ASML’s Q2 earnings results

The Netherlands-based company reported net sales of EUR5.43 billion in Q2, up from EUR3.53 billion in the previous year. It also saw net income more than double over the period, from EUR695 million to EUR1.41 billion. In the press release, CEO Peter Wennink said:

 “demand from our customers remains very strong, as reflected by record net bookings in the second quarter of EUR8.5 billion.”

These figures are good news for investors, especially with the announcement that ASML will now distribute quarterly dividends. This will start with a EUR1.37 dividend per share payable in August. This represents a strong growth rate from 2013, when the company paid a total dividend of EUR0.61 per share, showing its commitment to returning value to shareholders. This commitment was further emphasized with the repurchase of 2.3 million shares in Q2. Share repurchases reduce the number of available shares on the market, thereby artificially driving up the value of an investor’s holdings. 

On a more negative note, ASML cut its full-year guidance as supply constraints drive more fast shipments, which leads to delayed revenue recognition into 2023. This delayed revenue is forecast to total EUR2.8 billion, up from forecasts of EUR1 billion. The company has cut its forecast for revenue growth from 20% in Q1 to 10% as it sees some customers in consumer-facing markets are reducing their demand for ASML’s machinery.

How did ASML’s results impact its share performance?

The company saw its share price drop by roughly 1% after initially reporting its earnings. Investors were spooked by the lower revenue and earnings forecasts. However, this decline was brief, leading to ASML’s share price climbing by 3.22% by the end of trading. This was likely due to investors focusing more on the company’s positive results in the second quarter, along with record bookings and updates to its dividend policy. 

This appreciation managed to ease the deterioration in the company’s share price, which has fallen by 35.50% this year, or ten percentage points more than the NASDAQ Composite Index (NASDAQ: IXIC). ASML’s share price is up 2.15% in pre-market trading. 

At the time of writing, EUR1 was equivalent to $1.02.