Semiconductor equipment supplier ASML on Wednesday beat analyst estimates for the second quarter and with its guidance for the current period. But ASML stock fell on its cautious longer-term outlook.
The Dutch company earned the equivalent of $5.37 a share on sales of $7.52 billion in the June quarter. ASML reports financial results in euros.
Analysts polled by FactSet had expected ASML earnings of $5.10 a share on sales of $7.39 billion. In the year-earlier period, ASML earned $3.62 a share on sales of $5.55 billion, FactSet said.
For the current quarter, ASML forecast sales of $7.57 billion, based on the midpoint of its guidance. Analysts were looking for $7.14 billion in sales for the third quarter. In the same quarter last year, ASML posted sales of $5.66 billion.
Also, ASML predicted sales growth of 30% in 2023, vs. Wall Street's goal of 27%. ASML had previously forecast 25% sales growth for the year.
ASML Stock Is On Six IBD Lists
On the stock market today, ASML stock dropped 5.5% to close at 715.78.
The Netherlands-based company makes advanced lithography equipment for etching tiny circuits onto semiconductors.
"Our customers across different market segments are currently more cautious due to continued macroeconomic uncertainties, and therefore expect a later recovery of their markets," Chief Executive Peter Wennink said in a news release. "Also, the shape of the recovery slope is still unclear."
He added, "However, our strong backlog of around 38 billion euros ($42.6 billion) provides us with a good basis to navigate these short-term uncertainties."
ASML stock is on at least six IBD lists. They include the IBD 50, Leaderboard, Big Cap 20, Sector Leaders, Global Leaders and Tech Leaders.
ASML Is A Recent Breakout
Wells Fargo analyst Joe Quatrochi said ASML's second-quarter report was positive but its commentary warned of a softening of demand in 2024. Still, he reiterated his overweight, or buy, rating on ASML stock and raised his price target to 800 from 775.
The positive long-term thesis for ASML stock is unchanged, he said in a note to clients.
"While ASML's 2024 demand commentary has somewhat softened given macro (conditions), we think the near-term driver of shares remains ASML's ability to fully book 2024," Quatrochi said.
On July 13, ASML stock broke out of a flat base at a buy point of 747.13, according to IBD MarketSmith charts.
ASML is tied for first place in IBD's semiconductor equipment industry group, according to IBD Stock Checkup. It has a best-possible IBD Composite Rating of 99.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
