ASML Stock: Why The Price Fell Today

By Amit Chowdhry ● Oct 20, 2021
  • The stock price of ASML Holding NV (NASDAQ: ASML) fell by over 3% during intraday trading today. This is why it happened.

The stock price of ASML Holding NV (NASDAQ: ASML) fell by over 3% during intraday trading today. Investors are responding negatively to the Q4 2021 expectations. According to Barron’s, the fourth quarter earnings guidance was 4% below consensus expectations.

These are the highlights from the quarter

— Q3 net sales of €5.2 billion, gross margin of 51.7%, net income of €1.7 billion

— Q3 net bookings of €6.2 billion

— ASML expects Q4 2021 net sales between €4.9 billion and €5.2 billion and a gross margin between 51% and 52%

For the EUV business, the company had a record quarter in terms of shipments and revenue, due to the volume as well as the share of TWINSCAN NXE:3600D systems. And the TWINSCAN NXE:3600D achieved a record of 160 wafers per hour at customers’ sites.

And for the DUV business, the company reached a milestone as we shipped the 1000th ArF immersion scanner. The first immersion system designed to support volume manufacturing, the XT:1700Fi was shipped 15 years ago.
On October 19, 2021, the company reached an agreement with Jenoptik AG whereby they will acquire the Medical Applications and Swiss Optic business of Berliner Glas. And the deal is targeted to close by the end of the year, subject to regulatory approvals. This concludes their divestment plans regarding the non-semiconductor businesses of Berliner Glas. ASML had acquired Berliner Glas in 2020.

Interim dividend and share buyback program
The interim dividend for 2021 will be €1.80 per ordinary share. And the ex-dividend date as well as the fixing date for the EUR/USD conversion will be November 2, 2021, and the record date will be November 3, 2021. This dividend will be made payable on November 12, 2021.

As part of its financial policy to return excess cash to its shareholders through growing annualized dividends and regularly timed share buybacks, ASML had announced a new share buyback program which started on July 22, 2021 and is to be executed by December 31, 2023. And as part of this program, ASML intends to repurchase shares up to an amount of €9 billion, of which we expect a total of up to 0.45 million shares will be used to cover employee share plans. ASML intends to cancel the remainder of the shares repurchased. In the third quarter, we purchased around €2.4 billion of shares under the current and previous program.

The share buyback program will be executed within the limitations of the existing authority granted by the Annual General Meeting of Shareholders (AGM) on April 29, 2021, and of the authority to be granted by future AGMs. The share buyback program may be suspended, modified or discontinued at any time. All transactions under this program will be published on ASML’s website on a weekly basis.

KEY QUOTES:
“Our third-quarter net sales came in at €5.2 billion with a gross margin of 51.7%, both within our guidance. Our third-quarter net bookings came in at €6.2 billion, including €2.9 billion from EUV systems.”

“The demand continues to be high. The ongoing digital transformation and current chip shortage fuel the need to increase our capacity to meet the current and expected future demand for Memory and for all Logic nodes.”

“ASML expects fourth-quarter net sales between €4.9 billion and €5.2 billion with a gross margin between 51% and 52%. ASML expects R&D costs of around €670 million and SG&A costs of around €195 million. For the full year, we are on track to achieving growth approaching 35%.”

  • ASML President and Chief Executive Officer Peter Wennink

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.