ASML beats Q2 earnings forecasts; bookings rise on AI demand

ASML beat second-quarter earnings forecasts on Wednesday as the world's largest supplier of chipmaking equipment saw strong sales to China and a rise in new AI-driven bookings.

In his first results as CEO Christophe Fouquet said ASML continues to view 2024 as a "transition year" with broadly flat performance as it prepares for a strong 2025.

"We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," Fouquet said in a statement.


Net income of 1.6 billion euros ($1.74 billion) for the quarter ended June 30 was down 19% from a year earlier but beat the 1.41 billion expected by analysts, LSEG data showed.

Revenue fell 9.5% to 6.2 billion euros but topped an analysts estimate of 6.04 billion.

ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips.

Chinese chipmakers, however, face escalating U.S.-led restrictions on ASML's top-end gear. Instead, they have been ramping up purchases of equipment used to make older generations of chips widely used in cars and industrial applications.

China accounted for 49% of ASML's sales in the second quarter.

Bloomberg reported on Tuesday that the U.S. is privately telling allies including the Netherlands and Japan that it may invoke the "Foreign Direct Product Rule" to unilaterally restrict products made using U.S. technology.

Analysts said the report could weigh on ASML shares on Wednesday.

"The geopolitical angle....is more likely to be in focus today than the results," Citi analysts wrote in a note.

ASML declined to comment.

Shares in Europe's second-largest listed company behind pharmaceuticals maker Novo Nordisk were seen trading 4% lower ahead of the start of trade in Amsterdam, and pulling other European chip stocks with them.

ASML's shares have risen 45% this year and are trading near record highs, about 40 times forecast 12-month forward earnings.

Its new bookings increased to 5.6 billion euros from 3.6 billion euros in the first quarter, with about half of that coming from the its most advanced EUV product lines -- vital to manufacturing AI and smartphone chips.

Analysts had expected ASML's order book to increase to about 5 billion euros, according to estimates compiled by Visible Alpha.

ASML's top customer is Taiwan's TSMC, which makes chips for Nvidia and Apple.

"EUV orders increased substantially" in the quarter, Mihuzo Securities analyst Kevin Wang told Reuters. "We attribute this to strong orders from TSMC and Intel."

TSMC, Intel and Samsung are engaged in new construction projects that will be outfitted with equipment in 2025-2027.

($1 = 0.9172 euros)