ASML: Export Restrictions Kill Key Growth Driver

seekingalpha10-16

ASML Holding N.V. dropped 16% in Tuesday trading.The company released earnings early accidentally, showing poor guidance.Despite a strong moat, ASML appears to have lost a major growth driver.Sundry ...

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setia100
10-16
setia100
Very clearly known that it's Butchered by US sanctions and yet traders kept supporting its stock price ❗😂

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nASML: Export Restrictions Kill Key Growth Driver\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-16 21:10 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4726977-asml-export-restrictions-kill-key-growth-driver><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>ASML Holding N.V. dropped 16% in Tuesday trading.The company released earnings early accidentally, showing poor guidance.Despite a strong moat, ASML appears to have lost a major growth driver.Sundry ...</p>\n\n<a href=\"https://seekingalpha.com/article/4726977-asml-export-restrictions-kill-key-growth-driver\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1734074674.USD","symbol_name":"NINETY ONE GSF ASIA PACIFIC FRANCHISE \"A\"(USD) ACC","start_time":0,"source_url":"https://seekingalpha.com/article/4726977-asml-export-restrictions-kill-key-growth-driver","article_id":"2475123966","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2475123966","pubTimestamp":1729084210,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"ASML Holding N.V. dropped 16% in Tuesday trading.The company released earnings early accidentally, showing poor guidance.Despite a strong moat, ASML appears to have lost a major growth driver.Sundry Photography ASML Holding N.V.  is crashing in Tuesday trading as Bloomberg reported on the company's accidental premature release of earnings results. These were expected after the close on Wednesday , but seem to have been posted on the investor relations site early due to an IT error. The primary impetus for the fall appears to be a major drop-off in 2025 guidance due to export restrictions that will curb revenue from Chinese sources significantly. Following this news, while ASML shares are now cheaper, I wouldn't say they are cheap. 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(NASDAQ:ASML) is crashing in Tuesday trading as Bloomberg reported on the company's accidental premature release of earnings results. These were expected after the close on Wednesday (tomorrow), but seem to have been posted on the investor relations site early due to an IT error. The primary impetus for the fall appears to be a major drop-off in 2025 guidance due to export restrictions that will curb revenue from Chinese sources significantly. Following this news, while ASML shares are now cheaper, I wouldn't say they are cheap.ASML investors have had quite the day! Not only were earnings results released a day early by mistake, but those results were extremely disappointing relative to expectations. Let's start with a quick recap of the numbers.Q3 2024 net sales were €7.47B, up 20% QoQ and beating consensus estimates of €7.17B, and net income was €2.08B, up 32% QoQ and beating consensus of €1.91B. Q4 net sales guidance also beat estimates. Unfortunately for shareholders, that's about where the good news ends.The Netherlands, where ASML is based, recently enacted export restrictions on the sale of advanced chip-making equipment in an attempt to alleviate security concerns, specifically regarding sales to China. Investors have known about this development for weeks now, but the scale appears to be significantly larger than expected. Q3 bookings fell 53% QoQ to €2.63B, less than half the consensus estimate of €5.39B. I saw some buzz wondering how sales could be fine while bookings crater so completely -- well, the answer is government intervention!The Dutch government now has discretion on a case-by-case basis on who ASML sells equipment to. This means there will likely need to be thorough reviews of every ASML sale outside the whitelisted markets, and if you're even tangentially familiar with bureaucracy, the only guarantee is that it moves extremely slowly. So not only will the sales process become drawn out, but inevitably some will be rejected. This puts a major cost and time burden on the company, and the outlook proves that out.For FY2025, ASML expects net sales of between €30B to €35B (midpoint of €32.5B), down from between €30B to €40B, (midpoint of $35 billion), which comes out to a reduction of almost 10%. Those sales will generate fewer profits too, as the company is now guiding for a ~52% gross margin, down from 55%, which comes out to a reduction in gross profit of around 18%, around the amount that shares have dropped today.CFO Roger Dassen made a statement on Tuesday indicating that much of this shortfall will come from China: after recording nearly 50% of sales in China in the previous quarter, ASML expects about 20% in 2025. And unfortunately, that's not due to the company diversifying its revenue streams.It's difficult to see much cause for optimism following these results. The company's business model remains sound, and it remains the undisputed and sole supplier of the advanced machinery that will power the cutting-edge semiconductors of the future. However, these export restrictions appear to have a real bite, and coupled with the US' commitment to similar restrictions, I don't think the Dutch government will be very forgiving when it comes to its review of these sales. Considering the current geopolitical landscape, this chunk of revenue and some economies of scale that were keeping gross margin in the mid-50% range appear to be gone for the foreseeable future.Further, negative sentiment from this erosion in operating results isn't likely to abate in the short term. China was considered the primary growth driver for ASML considering the relative saturation of the chip-making industry in most Western-aligned countries. With that outlet no longer viable, I think we will see ASML's growth stall for possibly the next couple of years. I still think long-term investors could nibble here for a company with a solid moat in an essential sector, but these catalysts could take significantly longer to play out than previously hoped.Investor TakeawayASML's early results indicate export restrictions are seriously hurting the company's future growth prospects, especially in China. Sales to parties the Dutch government deems will be heavily restricted, and the bureaucracy of reviews will likely add to the time and costs of transactions for ASML.With a primary growth driver, China, gone, it could be a while before investor sentiment on ASML Holding N.V. stock turns around. I don't think shareholders need to sell, but we could be range-bound for the foreseeable future while ASML scrambles to boost growth through other means. Long-term investors can perhaps get a good entry into an unchallenged leader in a vital industry, but it could take a while to see the fruits of such an investment after these negative developments.Thanks for reading!Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"Policy And Regulatory,analysis","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":360697221161128,"gmtCreate":1729086761338,"gmtModify":1729086765242,"author":{"id":"3567852837945728","authorId":"3567852837945728","name":"setia100","avatar":"https://community-static.tradeup.com/news/5d07af59743ad001196b7aca5f1726d7","vip":1,"crmLevel":5,"crmLevelSwitch":0,"authorIdStr":"3567852837945728","idStr":"3567852837945728"},"htmlText":"Very clearly known that it's&nbsp;Butchered by US sanctions and yet traders kept supporting its stock price ❗😂","listText":"Very clearly known that it's&nbsp;Butchered by US sanctions and yet traders kept supporting its stock price ❗😂","text":"Very clearly known that it's Butchered by US sanctions and yet traders kept supporting its stock price ❗😂","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/360697221161128","repostId":2475123966,"repostType":4,"repost":{"id":"2475123966","pubTimestamp":1729084210,"share":"https://ttm.financial/m/news/2475123966?lang=&edition=fundamental","pubTime":"2024-10-16 21:10","market":"nz","language":"en","title":"ASML: Export Restrictions Kill Key Growth Driver","url":"https://stock-news.laohu8.com/highlight/detail?id=2475123966","media":"seekingalpha","summary":"ASML Holding N.V. dropped 16% in Tuesday trading.The company released earnings early accidentally, showing poor guidance.Despite a strong moat, ASML appears to have lost a major growth driver.Sundry Photography ASML Holding N.V.  is crashing in Tuesday trading as Bloomberg reported on the company's accidental premature release of earnings results. These were expected after the close on Wednesday , but seem to have been posted on the investor relations site early due to an IT error. The primary impetus for the fall appears to be a major drop-off in 2025 guidance due to export restrictions that will curb revenue from Chinese sources significantly. Following this news, while ASML shares are now cheaper, I wouldn't say they are cheap. Data by YCharts ASML investors have had quite the day!","content":"<html><head></head><body><ul style=\"\"><li><p>ASML Holding N.V. dropped 16% in Tuesday trading.</p></li><li><p>The company released earnings early accidentally, showing poor guidance.</p></li><li><p>Despite a strong moat, ASML appears to have lost a major growth driver.</p></li></ul><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/c99fd2028a6e644b80883726a134d62a\" alt=\"Sundry Photography\" title=\"Sundry Photography\" tg-width=\"750\" tg-height=\"500\"/><span>Sundry Photography</span></p><p></p><p><strong>ASML Holding N.V.</strong> (NASDAQ:ASML) is crashing in Tuesday trading as Bloomberg reported on the company&#39;s accidental premature release of earnings results. These were expected after the close on Wednesday (tomorrow), but seem to have been posted on the investor relations site early due to an IT error. The primary impetus for the fall appears to be a major drop-off in 2025 guidance due to export restrictions that will curb revenue from Chinese sources significantly. Following this news, while ASML shares are now cheaper, I wouldn&#39;t say they are cheap.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/01b45840c581286767d271d09232f873\" tg-width=\"635\" tg-height=\"424\"/></p><p></p><p>ASML investors have had quite the day! Not only were earnings results released a day early by mistake, but those results were extremely disappointing relative to expectations. Let&#39;s start with a quick recap of the numbers.</p><p>Q3 2024 net sales were €7.47B, up 20% QoQ and beating consensus estimates of €7.17B, and net income was €2.08B, up 32% QoQ and beating consensus of €1.91B. Q4 net sales guidance also beat estimates. Unfortunately for shareholders, that&#39;s about where the good news ends.</p><p>The Netherlands, where ASML is based, recently enacted export restrictions on the sale of advanced chip-making equipment in an attempt to alleviate security concerns, specifically regarding sales to China. Investors have known about this development for weeks now, but the scale appears to be significantly larger than expected. Q3 bookings fell 53% QoQ to €2.63B, less than half the consensus estimate of €5.39B. I saw some buzz wondering how sales could be fine while bookings crater so completely -- well, the answer is government intervention!</p><p>The Dutch government now has discretion on a case-by-case basis on who ASML sells equipment to. This means there will likely need to be thorough reviews of every ASML sale outside the whitelisted markets, and if you&#39;re even tangentially familiar with bureaucracy, the only guarantee is that it moves extremely slowly. So not only will the sales process become drawn out, but inevitably some will be rejected. This puts a major cost and time burden on the company, and the outlook proves that out.</p><p>For FY2025, ASML expects net sales of between €30B to €35B (midpoint of €32.5B), down from between €30B to €40B, (midpoint of $35 billion), which comes out to a reduction of almost 10%. Those sales will generate fewer profits too, as the company is now guiding for a ~52% gross margin, down from 55%, which comes out to a reduction in gross profit of around 18%, around the amount that shares have dropped today.</p><p>CFO Roger Dassen made a statement on Tuesday indicating that much of this shortfall will come from China: after recording nearly 50% of sales in China in the previous quarter, ASML expects about 20% in 2025. And unfortunately, that&#39;s not due to the company diversifying its revenue streams.</p><p>It&#39;s difficult to see much cause for optimism following these results. The company&#39;s business model remains sound, and it remains the undisputed and sole supplier of the advanced machinery that will power the cutting-edge semiconductors of the future. However, these export restrictions appear to have a real bite, and coupled with the US&#39; commitment to similar restrictions, I don&#39;t think the Dutch government will be very forgiving when it comes to its review of these sales. Considering the current geopolitical landscape, this chunk of revenue and some economies of scale that were keeping gross margin in the mid-50% range appear to be gone for the foreseeable future.</p><p>Further, negative sentiment from this erosion in operating results isn&#39;t likely to abate in the short term. China was considered the primary growth driver for ASML considering the relative saturation of the chip-making industry in most Western-aligned countries. With that outlet no longer viable, I think we will see ASML&#39;s growth stall for possibly the next couple of years. I still think long-term investors could nibble here for a company with a solid moat in an essential sector, but these catalysts could take significantly longer to play out than previously hoped.</p><h2 id=\"id_1959669031\">Investor Takeaway</h2><p>ASML&#39;s early results indicate export restrictions are seriously hurting the company&#39;s future growth prospects, especially in China. Sales to parties the Dutch government deems will be heavily restricted, and the bureaucracy of reviews will likely add to the time and costs of transactions for ASML.</p><p>With a primary growth driver, China, gone, it could be a while before investor sentiment on ASML Holding N.V. stock turns around. I don&#39;t think shareholders need to sell, but we could be range-bound for the foreseeable future while ASML scrambles to boost growth through other means. Long-term investors can perhaps get a good entry into an unchallenged leader in a vital industry, but it could take a while to see the fruits of such an investment after these negative developments.</p><p>Thanks for reading!</p><p>Editor&#39;s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>ASML: Export Restrictions Kill Key Growth Driver</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nASML: Export Restrictions Kill Key Growth Driver\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-16 21:10 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4726977-asml-export-restrictions-kill-key-growth-driver><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>ASML Holding N.V. dropped 16% in Tuesday trading.The company released earnings early accidentally, showing poor guidance.Despite a strong moat, ASML appears to have lost a major growth driver.Sundry ...</p>\n\n<a href=\"https://seekingalpha.com/article/4726977-asml-export-restrictions-kill-key-growth-driver\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU1734074674.USD":"NINETY ONE GSF ASIA PACIFIC FRANCHISE \"A\"(USD) ACC","IE0004445239.USD":"JANUS HENDERSON US FORTY \"A2\" (USD) ACC","LU0097036916.USD":"贝莱德美国增长A2 USD","BK4588":"碎股","BK4585":"ETF&股票定投概念","BK4147":"半导体设备","ASML":"阿斯麦","LU2063271972.USD":"富兰克林创新领域基金","IE00BD6J9T35.USD":"NEUBERGER BERMAN NEXT GENERATION MOBILITY \"A\" (USD) ACC"},"source_url":"https://seekingalpha.com/article/4726977-asml-export-restrictions-kill-key-growth-driver","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2475123966","content_text":"ASML Holding N.V. dropped 16% in Tuesday trading.The company released earnings early accidentally, showing poor guidance.Despite a strong moat, ASML appears to have lost a major growth driver.Sundry PhotographyASML Holding N.V. (NASDAQ:ASML) is crashing in Tuesday trading as Bloomberg reported on the company's accidental premature release of earnings results. These were expected after the close on Wednesday (tomorrow), but seem to have been posted on the investor relations site early due to an IT error. The primary impetus for the fall appears to be a major drop-off in 2025 guidance due to export restrictions that will curb revenue from Chinese sources significantly. Following this news, while ASML shares are now cheaper, I wouldn't say they are cheap.ASML investors have had quite the day! Not only were earnings results released a day early by mistake, but those results were extremely disappointing relative to expectations. Let's start with a quick recap of the numbers.Q3 2024 net sales were €7.47B, up 20% QoQ and beating consensus estimates of €7.17B, and net income was €2.08B, up 32% QoQ and beating consensus of €1.91B. Q4 net sales guidance also beat estimates. Unfortunately for shareholders, that's about where the good news ends.The Netherlands, where ASML is based, recently enacted export restrictions on the sale of advanced chip-making equipment in an attempt to alleviate security concerns, specifically regarding sales to China. Investors have known about this development for weeks now, but the scale appears to be significantly larger than expected. Q3 bookings fell 53% QoQ to €2.63B, less than half the consensus estimate of €5.39B. I saw some buzz wondering how sales could be fine while bookings crater so completely -- well, the answer is government intervention!The Dutch government now has discretion on a case-by-case basis on who ASML sells equipment to. This means there will likely need to be thorough reviews of every ASML sale outside the whitelisted markets, and if you're even tangentially familiar with bureaucracy, the only guarantee is that it moves extremely slowly. So not only will the sales process become drawn out, but inevitably some will be rejected. This puts a major cost and time burden on the company, and the outlook proves that out.For FY2025, ASML expects net sales of between €30B to €35B (midpoint of €32.5B), down from between €30B to €40B, (midpoint of $35 billion), which comes out to a reduction of almost 10%. Those sales will generate fewer profits too, as the company is now guiding for a ~52% gross margin, down from 55%, which comes out to a reduction in gross profit of around 18%, around the amount that shares have dropped today.CFO Roger Dassen made a statement on Tuesday indicating that much of this shortfall will come from China: after recording nearly 50% of sales in China in the previous quarter, ASML expects about 20% in 2025. And unfortunately, that's not due to the company diversifying its revenue streams.It's difficult to see much cause for optimism following these results. The company's business model remains sound, and it remains the undisputed and sole supplier of the advanced machinery that will power the cutting-edge semiconductors of the future. However, these export restrictions appear to have a real bite, and coupled with the US' commitment to similar restrictions, I don't think the Dutch government will be very forgiving when it comes to its review of these sales. Considering the current geopolitical landscape, this chunk of revenue and some economies of scale that were keeping gross margin in the mid-50% range appear to be gone for the foreseeable future.Further, negative sentiment from this erosion in operating results isn't likely to abate in the short term. China was considered the primary growth driver for ASML considering the relative saturation of the chip-making industry in most Western-aligned countries. With that outlet no longer viable, I think we will see ASML's growth stall for possibly the next couple of years. I still think long-term investors could nibble here for a company with a solid moat in an essential sector, but these catalysts could take significantly longer to play out than previously hoped.Investor TakeawayASML's early results indicate export restrictions are seriously hurting the company's future growth prospects, especially in China. Sales to parties the Dutch government deems will be heavily restricted, and the bureaucracy of reviews will likely add to the time and costs of transactions for ASML.With a primary growth driver, China, gone, it could be a while before investor sentiment on ASML Holding N.V. stock turns around. I don't think shareholders need to sell, but we could be range-bound for the foreseeable future while ASML scrambles to boost growth through other means. Long-term investors can perhaps get a good entry into an unchallenged leader in a vital industry, but it could take a while to see the fruits of such an investment after these negative developments.Thanks for reading!Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. 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