AMSTERDAM ASML (ASML.AS), the world's biggest manufacturer of tools for semiconductor chip makers, trimmed its first-half sales forecast on Wednesday, blaming slower second-quarter sales to some customers. Its shares fell sharply on the news.
The Dutch firm said it expected sales of 3 billion euros ($4.2 billion) in the first half of its fiscal year, including sales of extreme ultraviolet (EUV) systems, which will enable chipmakers to produce smaller, more powerful semiconductor wafers.
ASML had previously forecast sales of 3 billion euros excluding the EUV systems. Each EUV system typically sells for about 60 million euros and the firm has said it expects to book revenue for two systems in the first half.
"Sales in the second quarter are ... expected to be affected by adjustments of system demand from some logic customers," it said in an earnings statement. Logic chips process information, as opposed to memory chips that store data. They are made by all the main semiconductor companies.
ASML supplies most of the world's major chip manufacturers, including Samsung Electronics Co. Ltd (005930.KS), Intel Corp (INTC.O) and Taiwan Semiconductor Manufacturing Co Ltd (TSMC) (2330.TW), and acts as a leading indicator of their fortunes.
The company said demand for equipment to make logic chips had slowed slightly in the first quarter after a steep ramp-up in previous periods, but did not elaborate.
ASML shares fell sharply in early trade, then trimmed losses to trade down 3.3 percent to 59.71 euros at 0855 GMT.
ASML reported first-quarter net profit of 249 million euros, on sales of 1.4 billion euros, roughly in line with forecasts. But its new order intake of just over 1 billion euros was a negative surprise, according to Guenther Hollfelder, analyst at Baader Bank Group.
"Against the backdrop of the current semiconductor market environment we would not have expected such a significant miss," Hollfelder wrote in a note to clients.
In the last quarter of 2013, ASML's net bookings excluding EUV systems totalled nearly 1.5 billion euros.
ASML has invested heavily in EUV technology, buying Cymer Inc, a supplier of lithography light sources used to make chips, for $2.5 billion in October 2012 to speed up development of the technology after it suffered a string of setbacks.
Kempen & Co analyst Erwin Dut said the reduction in the sales forecast was a result of ASML having only a few large customers, which can create volatility in quarterly results. But he said the mid- to long-term case for the business was intact.
"It's disappointing but it doesn't really change our case on ASML," said Dut. He has a hold recommendation on the share, but is starting to turn more positive.
Around 80 percent of ASML's products go to customers in Asia. The rest are sold to clients in the United States and Europe.
The company had been expected to post first-quarter sales of 1.4 billion euros and a profit of 228 million euros, according to the average of 11 analysts polled by Reuters.
For the second quarter of this year, ASML said it expects sales of 1.6 billion euros, including EUV sales. It booked revenue for one EUV system in the first quarter. For the full year, it expects to book revenue from eight EUV systems, it said.
($1 = 0.7234 Euros)
(Editing by Miral Fahmy and Mark Potter)