ASML Reports Strong Q3 2023 Profit but Forecasts Flat Revenue for 2024

ASML Reports Strong Q3 2023 Profit but Forecasts Flat Revenue for 2024

UTC by Benjamin Godfrey · 3 min read
ASML Reports Strong Q3 2023 Profit but Forecasts Flat Revenue for 2024
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ASML is taking a conservative view of 2024, with revenue projections similar to 2023.

ASML Holding NV (NASDAQ: ASML), one of the world’s leading semiconductor firms has reported a significant year-on-year rise in profit for the third quarter of 2023, exceeding analyst expectations. However, the company forecasts that its revenue in 2024 will remain flat.

This comes as the semiconductor industry experiences a period of uncertainty, with ASML CEO Peter Wennink acknowledging the ongoing challenges faced by the market in a recent report.

ASML Third Quarter Q3 Profit

In the third quarter of 2023, ASML reported net sales of 6.67 billion euros, slightly lower than the 6.71 billion Euros expected by analysts. Despite this, net sales saw a notable 15.5% increase from the 5.78 billion Euros reported during the same period the previous year.

Net profit for the same quarter reached 1.89 billion Euros, surpassing the anticipated 1.8 billion Euros. This represented an 11% growth in net profit compared to the third quarter of 2022. It’s important to note that ASML’s third-quarter figures reflected a decline from its second-quarter results.

The company, which plays a crucial role in the semiconductor industry, is known for its role in manufacturing the tools required to create the most advanced chips in the world. According to Wennink, “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.”

ASML is taking a conservative view of 2024, with revenue projections similar to 2023. Wennink mentioned, “But we also look at 2024 as an important year to prepare for significant growth that we expect for 2025.”

The conservative projection has riled investors as the firm’s shares plunged by 2.73% in the pre-market to $591.70

Market Challenges

The semiconductor market has faced a challenging year, with weakened demand for products like smartphones and laptops, which are major consumers of semiconductor components.

Prominent chip manufacturers like Taiwan’s TSMC Ltd (TPE: 2330) and South Korea’s Samsung Electronics Co Ltd (KRX: 005930), both key customers of ASML, have scaled back their capital expenditure in response to the market challenges. ASML, headquartered in the Netherlands, has also been embroiled in the geopolitical tensions over technology between the U.S. and China due to the critical nature of its tools.

The Netherlands implemented export restrictions on advanced semiconductor equipment, requiring companies to obtain government licenses to take specific technologies abroad. This move came in response to the US’s own extensive restrictions on technology exports to China and its calls for allies to follow suit.

ASML has, however, reassured stakeholders that these measures are unlikely to impact its 2023 financial results. The company maintains its guidance for net sales to increase by 30% year-on-year for 2023.

Despite the challenges of the current semiconductor market, ASML continues to lead the industry in providing essential technology for chip manufacturing, positioning itself for a future period of significant growth.

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