ASML

ASML

06 September 2017Reading time: 3 minutes

ASML looks back at a fine quarter in which the manufacturer of chip machines saw the amount of orders for the EUV-chip machines increase even further. These positive developments are also reflected in the stock price.

 

As usual ASML (ISIN: NL0010273215) kicks of the Dutch results season and presented their second quarter results on July 19. Compared to the first quarter the revenue of the chip machine manufacturer increased with 8% to EUR 2.1 billion.

 

The revenue increase is partly due to the increasing sales of chip machines based on EUV (Extreme Ultraviolet Light). Since the beginning of this century ASML invests in this technique and it seems that it’s bearing fruit. Early March this year Vontobel already claimed that ASML had a large inflow of EUV orders and the chip machine manufacturer continued this trend during the second quarter. AMSL received 8 EUV orders during the second quarter, which represents EUR 800 million. Because of this the company now has 27 orders listed in their order book and therefore has a future revenue originated from this division of EUR 2.7 billion.

 

In the end ASML improved their net profit in the second quarter on a quarterly basis with 3% to EUR 466 million, whereby the profit per share increased from EUR 1.05 to EUR 1.08.

 

For the third quarter AMSL expects a revenue of approximately EUR 2.2 billion, where this was only EUR 1.81 billion a year earlier. For full 2017 the chip machine manufacturer expects a revenue growth of 25% to EUR 8.5 billion compared to 2016.

 

The results of ASML where better than most analysts expected. As a result the share is reiterated on the buyers lists and several analysts have adjusted their price targets upwards. Most analysts maintain a price target of approximately EUR 144.

 

Also positive is that other companies within the semiconductor industry presented good results recently. For example Intel listed a record revenue during the second quarter of almost USD 15 billion and the American chip manufacturer doubled its profit to USD 2.8 billion, while the German chip manufacturer Infineon increased its revenue with more than 12% to approximately EUR 1.8 billion. Infineon even tripled their operating profit to EUR 388 million.

 

Given the strong order book for especially EUV machines, investors who have faith in ASML can anticipate by for example a ASML BEST Turbo Long. However the price rate of the stock has increased significantly, 12% since our advice at March 8, and therefore there is a chance that some investors might take profit in the coming period. It remains to be seen how the future will develop.

 

Vontobel products are tradable at DEGIRO.


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21/09/2019 19:38:11