The semiconductor industry experienced significant turbulence when ASML (ASML, Financial), a major player in lithography machines, unexpectedly released its earnings report earlier than scheduled, leading to a sharp decline in its stock price. The company's Q3 order numbers, which were only half of market expectations, coupled with downgraded fiscal 2025 guidance, contributed to the broader market downturn.
ASML's earnings, initially planned for release on Wednesday, were accidentally leaked online late Tuesday. Despite efforts to remove the report, the damage was done. The premature release forced ASML to adjust its schedule and provide an official statement attributing the early publication to a "technical glitch."
The financials revealed that ASML's Q3 orders amounted to just €26 billion, starkly contrasting with the expected €54 billion. CEO Christophe Fouquet noted that total net sales by 2025 are anticipated to reach between €300 billion and €350 billion, a downshift from the previous guidance of €300 billion to €400 billion. Fouquet pointed out the disparity in recovery speeds across markets, with artificial intelligence showing strong growth but other sectors lagging, causing caution among clients.
ASML's revised financial report indicated a Q3 net sales figure of €75 billion, a gross margin of 50.8%, and a net profit of €21 billion. The company forecasts Q4 sales to be between €88 billion and €92 billion with gross margins between 49% and 50%. For 2024, net sales are expected to reach around €280 billion.
In a noteworthy mention, CFO Roger Dassen indicated that revenue from the Chinese market might constitute about 20% of the total next year, though further clarification from the management is anticipated.
The unexpected developments had a severe impact on ASML's stock, which dropped nearly 16% in European trading—the largest single-day decline since 1998—and similarly affected its position on the Nasdaq. The broader semiconductor sector also felt the impact, with Nvidia's shares dropping over 5% following its recent record high.
