ASML: Triple EPS Guidance Implies 20-50% Upside For 2015 ADR Shares
Jul. 16, 2014, 3:23 AM
- ASML's (NASDAQ:ASML) Q2 net profit of €399M (+60% q/q). Profit in Q2 a year earlier was €245.1M.
- Sales rose 39% y/y to €1.64B.
- ASML estimates Q3 net sales at €1.4B and gross margin at 42%.
- ASML expects FY14 net sales at €5.6B.
- Shares are -1.9% in Amsterdam.
Jul. 15, 2014, 5:30 PM
Jul. 8, 2014, 6:27 PM
- Applied Materials (AMAT) "made a compelling case that technology inflections could become tailwinds [for chip equipment demand] at the FinFET and 3D NAND transitions," writes Credit Suisse's John Pitzer after taking in the firm's analyst day (held at the Semicon West conference).
- Pitzer adds AMAT sees $10B+ in cumulative revenue opportunities from the deposition and etching markets related to 3D NAND flash investments. However, he thinks Lam Research (LRCX), which just offered a bullish analyst day outlook of its own, is a better 3D NAND play.
- Cowen's Timothy Arcuri argues strong FinFET (3D transistor) and 3D NAND capacity targets, together with healthy maintenance spend, "argues more re-rating for AMAT and the sector in general." At the same time, he's worried about the impact of 3D NAND growth on NAND supply, and thus the multiples afforded to SanDisk (SNDK), which has rallied strongly this year.
- AMAT remains confident the Tokyo Electron (TOELF) merger will close this year. The post-merger company will call itself Eteris. Analyst Robert Maire thinks AMAT/Tokyo will buy Entegris (ENTG) once the deal closes.
- KLA-Tencor (KLAC), though hiking its June quarter guidance, is a little cautious about near-term demand. "This is a quarter where we believe we're in a bit of a pause right now in the industry ... Bookings that we got, while strong, were really for foundry, and more for delivery and revenues that we'll see in calendar '15." Berenberg issued a cautious note last week.
- Trade group SEMI now expects total chip equipment spend to grow 20.8% in 2014 to $38.4B, and 10.8% in 2015 to $42.6B.
- Other industry names: ASML, UTEK, RTEC, KLIC, MTSN, ASMI, MKSI
Apr. 24, 2014, 1:42 PM
- Lam Research (LRCX +11%) beat FQ3 estimates and guided on its CC (transcript) for FQ4 revenue of $1.19B-$1.29B and EPS of $1.14-$1.28, above a consensus of $1.16B and $1.09. Ultratech (UTEK +3.6%) missed Q1 estimates, but has reiterated guidance for 25%-30% 2014 revenue growth (above a 23.5% consensus).
- Just as importantly for the industry, Lam has forecast the global wafer fab equipment market will be worth $32B in 2014 - $1B more than what Gartner previously forecast.
- Lam also mentioned it has "seen some strengthening" in DRAM equipment orders - clients have been conservative with their capex following industry consolidation - and a "sustained commitment" among logic/foundry clients (Intel and TSMC?) to advanced processes (20nm, 3D transistors, etc.). However, there have been "some slight delays" in 3D NAND flash investments.
- Chip equipment peers are also up: AMAT +1.4%. KLAC +1.5%. ASML +2.1%. ACLS +1.6%. CAMT +5.3%. RTEC +1.5%. PLAB +3.4%. One notable exception is Teradyne (TER -4.1%), which provided light Q2 EPS guidance - $0.36-$0.43 vs. a consensus of $0.49 - to go with a Q1 beat. Revenue guidance is in-line.
- The group sold off last week after ASML offered soft guidance and a cautious 2H outlook. KLA reports after the bell.
Apr. 16, 2014, 11:40 AM
- ASML (ASML -5.5%) has lowered its 1H14 sales outlook. Moreover, the lithography equipment kingpin says logic IC customers are "encountering timing uncertainties in next-generation device designs" for 2H, and that NAND flash memory makers are "continuing their evaluation of [3D] NAND and future-node planar technologies, resulting in uncertainties for system demand."
- ASML's remarks about logic customers might partly be a reference to Intel, which has reportedly delayed the launch of its 14nm Broadwell CPUs. NAND vendors have been keeping a lid on capex for some time; recent price pressure might encourage them to do so.
- Chip equipment peers Applied Materials (AMAT -2%), KLA-Tencor (KLAC -2.5%), Lam Research (LRCX -2.5%), Axcelis (ACLS -2.6%), Camtek (CAMT -5.8%), and Ultratech (UTEK -0.9%) are off in sympathy. Compared with many other tech companies, the group has held up well during the March/April selloff.
- One silver lining: ASML says multiple customers are qualifying 10nm EUV lithography equipment, and that it expects to recognize revenue on 8 EUV systems in 2014. Investments in both EUV and 450mm wafers have been delayed.
- Gartner has forecast chip wafer fab equipment spend will grow 14.9% in 2014 to $31B, after falling 9.1% in 2013.
Apr. 16, 2014, 9:09 AM
Apr. 16, 2014, 4:25 AM
- ASML's (ASML) Q1 net profit almost halved to €249.1M ($344M) from €481M in Q4 but exceeded expectations of €230M. Profit in Q1 a year earlier was €96M.
- Sales slumped 24% on quarter to €1.4B, as expected. On year, revenue rose 57% from €892M.
- ASML downgraded its H1 sales forecast due to slowing revenues in Q2, saying it expects turnover of €3B including extreme ultraviolet (EUV) systems for producing smaller chips. The company's prior guidance was €3B excluding EUV products.
- "That ASML is now including EUV in its sales guidance means a difference on a yearly basis of around €500-600M, which is about 10% of sales," says ING analyst Robin van den Broek.
- Shares are -3.6% in Amsterdam. (PR)
Apr. 16, 2014, 12:05 AM
Apr. 15, 2014, 5:30 PM
Mar. 13, 2014, 6:37 PM
- Lithography equipment giant ASML has "paused" the development of hardware meant to work with next-gen 450mm wafers, which offer 125% more wafer space (and thus better economies of scale) than current-gen 300mm wafers. Likewise, Applied Materials (AMAT) CEO Gary Dickerson says the 450mm migration "has definitely been pushed out from a timing standpoint."
- Due to ASML's move, Intel (INTC), which agreed in 2012 to pour $4.1B into the company to help finance investments in 450mm wafers and EUV lithography, has "adjusted" the pace of its payments to ASML.
- Last year, Intel began constructing a $2B Oregon development fab meant to be its first 450mm facility. But it's reevaluating its timetable amid soft PC demand and concerns about its share of the bill. Spokesman Chuck Mulloy: "We still believe 450 is the right thing to do ... But we have been clear: we will not do it ourselves."
- EUV, considered necessary to maintain Moore's Law long-term, has also seen delays. ASML CEO Peter Wennink recently predicted EUV will reach the stability levels required by chip manufacturers by the 2H16 or 2017.
- Other chip equipment makers: KLAC, LRCX, RTEC, NVMI, UTEK, TOELF
Jan. 24, 2014, 2:08 PM
- Chip equipment stocks aren't getting spared from a general market selloff after Samsung (SSNLF - the world's #2 chipmaker) guided for its 2014 chip capex to be flat Y/Y. AMAT -1.6%. LRCX -3.7%. ASML -0.7%. UTEK -2.2%. RTEC -3.2%. MTSN -5.1%.
- Industry analyst Robert Marie observes this is the first time since 2009 that Samsung hasn't upped its chip capex budget. With Intel and TSMC (the industry's two other big clients) also guiding for capex to be flat (if not down) this year, Marie is cautious about 2014 growth, even though others have forecast sales will rebound sharply this year following a rough 2013.
- KLA-Tencor (KLAC -2.2%) is joining the selloff even though the company posted an FQ2 EPS beat yesterday afternoon, and provided healthy FQ3 guidance - revenue of $790M-$850M and EPS of $1-$1.20 vs. a consensus of $814.5M and $1.11 - on its CC (transcript). KLA also forecast FQ3 bookings will be in a range of $700M-$800M (implies 10% Q/Q growth at the midpoint), and struck an upbeat tone about 2014 investments in 20nm and 3D NAND flash capacity.
- KLA still expects 10%+ industry growth this year, but admits its outlook is "slightly weaker" than it was three months ago. The company also believes industry adoption of EUV lithography (important for ASML) has generally been pushed out to the 7nm process node from the 10nm node.
Jan. 22, 2014, 3:33 AM
- ASML's (ASML) Q4 net profit jumped 62% to €481M vs forecasts of €422M.
- Sales climbed to €1.85B from €1.02B a year earlier and topped consensus of €1.81B, boosted by the acquisition of light-source manufacturer Cymer.
- Sold 53 new systems vs 25.
- Expects Q1 sales of €1.71B, below analyst estimates of €1.4B, and a gross margin of around 42%; reiterates its H1 revenue forecast of €3B, excluding extreme ultraviolet light (EUV) sales.
- Increases dividend by 15% to €0.61 a share.
- ASML says it's on track with the development of its EUV technology for producing smaller chips. The company has already delivered its first EUV scanners and expects to ship another eight in 2014. (PR)
Jan. 22, 2014, 12:05 AM
Jan. 21, 2014, 5:30 PM
Jan. 9, 2014, 9:41 AM
- Alcatel-Lucent (ALU -4.6%) has been cut to Hold by Deutsche, while rival Ericsson (ERIC -0.2%) has been upgraded to Buy. However, Morgan Stanley has started Alcatel at Overweight.
- Nvidia (NVDA -2.1%) has been cut to Hold by Canaccord a few days after unveiling its Tegra K1 app processors.
- Angie's List (ANGI +9.1%) has been upgraded to Strong Buy by Raymond James.
- Autodesk (ADSK +2.1%) has been upgraded to Overweight by Evercore.
- Chipmaker STMicroelectronics (STM -1.2%) has been cut to Sell by Deutsche, and CPU core licensing giant ARM (ARMH -5.5%) has been cut to Hold.
- EXFO (EXFO -8.3%) has been cut to Hold by TD Securities, and to Underperform by CIBC, after missing FQ1 estimates and providing soft FQ2 guidance.
- ASML (ASML +0.9%) has been started at Buy by ING.
Dec. 4, 2013, 4:49 PM
- During a Credit Suisse conference talk, KLA-Tencor (KLAC -2.7%) CFO Bren Higgins stated his company's FQ2 (Dec. quarter) bookings could miss the midpoint of its guidance range. The potential shortfall is attributed to a $100M order push-out for reticle inspection tools used in the production of cutting-edge 10nm chips.
- KLA had guided on its FQ1 CC (transcript) for FQ2 bookings of $800M-$950M ($875M midpoint), up from FQ1's $790M and well above revenue guidance of $670M-$730M.
- Susquehanna's Mehdi Hosseini, who rates KLA a Negative, is "puzzled" by Higgins' explanation, given Intel (long at the bleeding edge of chip manufacturing) is the only company investing in 10nm R&D for now - the chip giant is just getting set to mass-produce 14nm chips - and that KLA's reticle inspection bookings have been in the ~$70M range in recent quarters.
- The reticle inspection market has been a weak spot for KLA. However, during an upbeat September conference talk, Higgins said demand was improving.
- Chip equipment sales have been expected to improve in 2014: Trade group SEMI just estimated sales will rise 23% in 2014, after dropping 13% in 2013.
- Several chip equipment peers have followed KLA lower: AMAT -3%. ASML -2.5%. LRCX -2.9%. RTEC -1.5%. MTSN -2.5%.
ASML Holding NV engages in the manufacture, and trade of lithography systems for the semiconductor industry. It develops machines that are used for the production of integrated circuits and chips. The company was founded on April 1, 1984 and is headquartered in Veldhoven, Netherlands.
Industry: Semiconductor Equipment & Materials