ASML expects Q1 net sales to be between 6.1 billion euros and 6.5 billion euros with a gross margin between 49% and 50%. Wall Street thinks the effect of export control is uncertain while the Sculpta threat is limited.
ASML is scheduled to announce Q1 earnings results before the market opens on Wednesday, April 19th.
Latest Results
Its Q4 net income rose to 1.82 billion euros or 4.60 euros per share from 1.77 billion euros or 4.38 euros per share in the same quarter last year.
Total net sales in Q4 grew to 6.43 billion euros from 4.99 billion euros in the previous year.
Q1 Guidance
The company expects Q1 net sales to be between 6.1 billion euros and 6.5 billion euros with a gross margin between 49% and 50%.
For 2023, ASML expects continued strong growth with a net sales increase of more than 25% and a slight improvement in gross margin, relative to 2022.
Applied Materials' Sculpta Threat to ASML Dominance is Uncertain
Applied Materials, Inc. announced Centura Sculpta in Q1. According to the company, this tool will help semiconductor manufacturers reduce the need for double patterning EUV, which meant that the ASML Holding N.V. moat is not as strong as initially thought because this tool would challenge its EUV dominance.
Centura Sculpta is still unproven in HVM (high-volume manufacturing). Only time will tell if the benefits it will provide customers are worth it, especially after the introduction of high-NA reduces the need for EUV double patterning and as EUV gets more productive through the decade.
Keep an Eye on Dutch Export Controls
The Dutch government announced plans to implement new controls on the export of semiconductor technology, according to a letter from Dutch Trade Minister Liesje Schreinemacher to parliament. The restrictions will be introduced before the summer.
According to ASML's statement on March 8, 2023, it will need to apply for export licenses to ship the most advanced immersion DUV systems. However, it will take time for these controls to be translated into legislation and take effect.
Analyst Opinions
Morgan Stanley maintained the overweight rating and offered its price target of $824, 2023 will be a recovery year for semiconductors, as macro headwinds subside and demand for consumer devices remain sticky.
Barclay remained an Equal-Weight rating and offered a price target of $640. The bank estimates that the likely impact of Dutch export controls is low single-digit revenue risk but the information is currently limited.
Cowen & Co analyst Krish Sankar thinks that Applied Materials' Sculpta could add $200 million to $300 million in annual sales for Applied Materials, but won’t dent ASML’s extreme ultraviolet revenue in the near term.
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