ASML Bookings Drop 27% as Some Chipmakers Delay Orders
April 13, 2011, 6:29 AM EDTBy Maaike Noordhuis
(Updates with CFO comments starting in fifth paragraph.)
April 13 (Bloomberg) -- ASML Holding NV, Europe’s biggest chip-equipment maker, said first-quarter orders fell 27 percent as clients took more time to place orders because of shorter delivery times and disruptions by the Japanese earthquake.
The stock dropped as much as 2.9 percent in Amsterdam trading. The Veldhoven, Netherlands-based company booked systems worth 845 million euros ($1.2 billion), compared with 1.17 billion euros a year earlier. Orders dropped 63 percent from the record fourth quarter.
“This is without any doubt lower than expected,” said Jos Versteeg, an analyst at Theodoor Gilissen Bankiers, adding that analysts were looking for the order intake to exceed 1 billion euros in the first quarter. “Also the outlook for the second quarter seems weak.”
ASML, the maker of machines that produce chips for Apple Inc.’s iPods and Nokia Oyj’s mobile phones, said that some of its customers are taking more time before placing orders because of a shorter lead time for its most advanced immersion-systems. Some semiconductor manufacturers also delayed deliveries in the wake of the March 11 Japanese earthquake.
The company predicts, after “thorough investigation” into its own supply chain, that the impact from the earthquake on this year’ production is “negligible,” Chief Financial Officer Peter Wennink said in a video statement on the company’s website.
Sales Forecast
However, Wennink said the earthquake is hurting the business of some ASML clients.
ASML predicts 2011 sales to be “clearly above” 5 billion euros. It forecast a second-quarter order intake of between 900 million euros and 1 billion euros.
First-quarter net income jumped to 395 million euros from 107 million euros a year earlier, beating the 354 million-euro average of 21 analysts’ estimates compiled by Bloomberg. Sales almost doubled to 1.45 billion euros from 742 million euros.
“ASML reported decent first-quarter numbers but disappointed in order intake and gave concern that the impact from the slowdown in industry production in Japan may be wider than first thought”, said Lee Simpson, an analyst at Jefferies.
The global semiconductor equipment market gained 143 percent in 2010 to almost $41 billion after a slowdown in the two previous years, market researcher Gartner said April 4. ASML was the fastest-growing company in that segment last year, it said.
Demand
ASML is the world’s largest maker of machines to project lines on the silicon slices from which chips are made. Its main rival is Japan’s Nikon Corp. Applied Materials Inc., based in Santa Clara, California, is the world’s largest maker of semiconductor equipment.
“The semiconductor equipment market soared in 2010, driven by the pent-up demand from the 2008 and 2009 downturn, and a stronger economy than projected,” Klaus Rinnen, managing vice president at Gartner, said earlier this month. “Memory and foundry spending were the key drivers, although all areas showed significant growth.”
Gartner said April 4 that the recent earthquake in Japan will have a “near-term impact” on the industry and will hurt revenue in the second quarter. Semiconductor equipment manufacturers should be able to recover in the second half of the year, it said.
--Editors: Simon Thiel, Kenneth Wong.
To contact the reporter on this story: Maaike Noordhuis in Amsterdam at mnoordhuis@bloomberg.net
To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net
