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Dutch ASML's Market Cap Plummets by $53 Billion on Poor Forecasts
Chip-equipment giant ASML released a surprise third-quarter financial report on Tuesday. The company said the report was originally scheduled to be released a day later, but was posted on its website earlier than planned due to a technical error. The quarterly results looked good, but the company's 2025 revenue forecasts disappointed investors. As a result, ASML's share price fell 16.3%, and the company's market capitalization lost $53 billion in a day. That's the largest decline since ASML listed on the NASDAQ stock exchange in 2002.
Compared with the previous quarter, the company's profit rose from 1.58 billion euros to 2.08 billion euros (or 5.28 billion euros per share), and sales improved from 6.24 billion euros to 7.47 billion euros, both figures were better than expected. Analysts polled by FactSet had expected sales of 7.15 billion euros and earnings per share of 4.86 euros.
However, in the third quarter, ASML's orders totaled only €2.6 billion. This was much worse than analysts had expected, who expected the order value to exceed €5 billion. Meanwhile, ASML made the announcement after publishing its financial results for the second quarter. CEO Peter Wennink said that the second half of 2024 should be an even stronger year for both the company and the entire semiconductor industry.
Now ASML's 2025 forecasts are even worse than expected. The company expects sales next year to be between 30 billion and 35 billion euros, with gross profit margins of 51 to 53 percent. In previous forecasts, the company had said annual sales would reach 40 billion euros, with gross profit margins of 54 to 56 percent.
ASML's negative 2025 forecast dragged the entire semiconductor sector of the stock market down. AMD shares fell by 5.2%, Nvidia shares by 4.7%, and Intel shares by 3.3% by the end of the trading day.