AMSTERDAM (Reuters) - ASML Holding NV ASML.AS, a key supplier to computer chip makers such as Samsung and Intel, reported worse-than-expected first quarter earnings on Wednesday but said customer demand for its products remains strong despite the coronavirus outbreak.
ASML reported net profit of 391 million euros ($429 million), up from 355 million euros in the same period a year ago, but behind analysts’ consensus estimates of 534 million euros, as polled by Refinitiv.
“We had a solid order intake,” said CFO Roger Dassen in a videotaped statement. “We had no push-outs, no cancellations ... So Q2 can be a really good quarter, we should be looking at a 50% improvement of revenue from Q1.”
First quarter sales were 2.44 billion euros, in line with a company profit warning on March 30 that cut first quarter guidance to 2.4-2.5 billion euros from a previous 3.1-3.3 billion euros. [FWN2BM025].
The company cited delivery delays amid travel restrictions, notably to China.
Dassen said the company could not issue formal full year guidance, but “if we look at the current demand and if we look at the current shipment plans, that should really enable us to achieve the numbers we’ve talked about before.”
In January, the company forecast growth of sales and profits of at least 10 percent in 2020.
ASML is the dominant maker of lithography machines, giant systems that cost up to 200 million euros each and are used by semiconductor manufacturers such as TSMC, Samsung and Intel to help make the circuitry of computer chips.
TSMC on April 10 reported a major recovery of sales in March, while rival Samsung on April 7 said solid chip sales in the first quarter offset weakness in its other divisions as demand from laptop makers and data centres grew amid a shift to home working. [P8N2BR01D].
CFO Dassen said ASML’s manufacturing sites continue to operate, but installations at customer factories have become more difficult due to issues such as engineers having to wait in quarantine between site visits.
He said that chipmaker customers are telling ASML that end markets present a mixed bag but on the whole fab (computer chip factory) operations are “pretty normal.”
While sales of some products such as chips for carmakers could be impacted, others such as “anything related to notebooks, advanced communications systems, but also data warehouses -- those products are in very very high demand,” Dassen said.
And chipmakers are continuing to invest: ASML booked 3.1 billion euros in new orders during the first quarter.
“The lead time is longer than anything else that they have in the fabs,” Dassen said. “The last thing they would ever cancel is our equipment.”
Reporting by Toby Sterling; Editing by Muralikumar Anantharaman and Raju Gopalakrishnan and Kirsten Donovan
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