ASML Q3 sales, net income down y/y
By Ann Steffora Mutschler, Senior Editor -- EDN, October 17, 2007
Veldhoven, Netherlands-based semiconductor manufacturing equipment supplier ASML Holding NV today reported its Q3 net sales were $1.3 billion (940 million euros), up sequentially from Q2 net sales of $1.3 billion (935 million euros), but down from Q3 2006 net sales of $1.4 billion (958 million euros).
ASML’s Q3 net income was $238.5 million (168 million euros) or 17.9 percent of net sales compared to Q2 net income of $228.5 million (161 million euros) or 17.2 percent of sales, and fell below Q3 2006 net income of $244.1 million (172 million euros) or 17.9 percent of sales.
Q3 net bookings were valued at $1.2 billion (857 million euros) with 40 systems including 35 new and 5 used systems, leading to an order backlog valued at $2.5 billion (1.769 billion euros) as of September 30.
Eric Meurice, president and CEO of ASML believes the results show the company’s ability to weather the semiconductor cycle.
ASML is also helping Belgian research center IMEC reach its sub-32-nm goals. IMEC said Tuesday that it will install an ASML extreme ultra violet pre-production lithography tool in its 300-mm facility in 2010.
“Confidence in the execution of our strategy has led us to return close to two billion euros to our shareholders in less than two years, and we have decided to use excess cash for a new buy back program of up to 14 million of our shares,” Meurice said in a statement.
The Q3 average selling price (ASP) for a new system increased to $21.6 million (15.2 million euros), compared with the Q2 ASP for a new system of $18 million (12.7 million euros), due to a richer mix of leading edge immersion systems shipped. The Q3 ASP for all ASML systems sold was $20.4 million (14.4 million euros), compared with the Q2 ASP of $17 million (12 million euros).
Q3 gross margin was 41.2 percent, compared with the Q2 gross margin of 41.1 percent.
In Q3, stockholders converted $476.9 million (336 million euros) principle amount of the convertible subordinated notes due 2010 into approximately 24 million shares. Approximately 17 million of those shares were newly issued shares and 7 million were treasury shares. ASML is calling today the remainder of the outstanding 2010 bonds for redemption on November 7, representing $62.5 million (44 million euros) in principle amount.
Also, in an ongoing effort to return excess cash to shareholders, ASML returned $1.4 billion (1 billion euros) in cash to its shareholders on October 4 as part of the capital restructuring announced on May 31, bringing the cumulative amount returned to shareholders since May 2006 to $2.6 billion (1.8 billion euros).
The company said it will begin a new share buy-back program for a maximum of 14 million shares to cover for outstanding employee stock options, and will be funded out of its cash flow from operations and liquidity buffer.
The purchase of the shares can take place at any time during a period ending on September 28, 2008, within the mandate granted by the general meeting of shareholders.
Looking ahead to Q4, Meurice noted, “As expected, demand for ASML machines has picked up, driven by an industry need for our most advanced immersion machines. The improving trend is led by flash memory chip makers which have short term capacity needs and are moving to new products at 45- and 55-nm nodes.”
“Following on in the medium term, continued price pressure in DRAM is pushing memory makers to more cost effective technology transitions that are enabled by immersion systems, as well as factory conversions from 200- to 300-mm equipment. These technology upgrades, added to an expected healthy although reduced DRAM memory unit growth, puts solid fundamentals under our memory business,” he continued.
“Order intake at foundries should moreover rebound, as 2007 capacity build-up has been slow and utilization rates have been rising steadily since the first quarter of this year. We therefore expect that fourth quarter order unit intake will exceed third quarter bookings, and we see potential for our revenues over the first three quarters of 2008 to exceed the first three quarters of 2007,” Meurice added.
ASML plans to ship 55 systems in Q4 with an ASP of $24 million (16.9 million euros) for new systems and an ASP for all systems of $21.3 million (15 million euros). The company expects a gross margin in Q4 between 40 and 41 percent with R&D expenditures to increase to $177.4 million (125 million euros).
