The Wall Street Journal-20080117-ASML Issues Cautious 2008 Outlook
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ASML Issues Cautious 2008 Outlook
AMSTERDAM -- ASML Holding NV, an equipment supplier to some of the world's largest chip makers, yesterday issued a cautious outlook for 2008 as it posted a slight rise in fourth-quarter net profit, partly thanks to a tax gain.
Shares in Netherlands-based ASML fell 6.9% to 17.20 euros ($25.50) in Amsterdam after the company failed to confirm an earlier forecast for 2008. Gloomy projections from a key client, U.S. chip maker Intel Corp., also weighed on the stock, analysts said.
ASML is the world's largest maker of lithography systems, which map out tiny electronic circuits on silicon wafers. It competes with Nikon Corp. and Canon Inc.
Intel said Tuesday that it was cautious about business conditions in the first quarter and the rest of the year. That followed a statement by another ASML customer, Samsung Electronics Co., which said it expected chip profits to fall further during the first quarter before starting to recover.
ASML said quarterly net profit edged up to 206.1 million euros from 205.5 million euros a year earlier, boosted by income of 35 million euros from the settlement of several tax contingencies. Net sales fell 8.9% to 972.9 million euros from 1.07 billion euros -- though both net profit and sales beat analyst expectations.
Petercam analyst Eric de Graaf said the results are outstanding, though he stressed that ASML seems to have become more cautious on its outlook for 2008, comments echoed by other analysts.
"Although ASML foresees robust sales and profit in the first half, the earlier guidance of higher sales in the first three quarters of 2008 than in the same period of 2007 seems to have vanished," said Kempen & Co. analyst Jan Willem Berghuis.
An ASML spokesman said the potential for higher revenue in the first nine months of 2008 than in the year-earlier period is still there, but depends, among other factors, on global economic circumstances.
"Our customers are more prudent now, given the current economic circumstances," said Chief Financial Officer Peter Wennink, adding that "the uncertainty about where the economy will go is now higher than it was a quarter ago."
Chief Executive Eric Meurice sought to ease investor worries, saying he doesn't expect bookings to be a problem in 2008. "We re-emphasize our optimism," Mr. Meurice said, though he acknowledged that it is hard to say when bookings will come and how much value the orders will represent.
