Leading European tech company ASML has given higher guidance for its 2023 outing following a sound Q4 2022 earnings report.
Advanced Semiconductor Materials Lithography (ASML) recently posted its Q4 2022 financial report, which beat the earnings forecast for the period. Europe’s largest technology company raked in 6.43 billion euros for the period that ended December 31st. Meanwhile, analysts were expecting a revenue haul of 6.38 billion euros for the fourth quarter of last year.
ASML also reported a Q4 2022 net profit of 1.82 billion euros compared to the consensus estimate of 1.70 billion euros. In addition, the Dutch multinational tech corporation also saw a record-high order backlog of 40 billion euros.
ASML’s latest quarterly growth came amid the macroeconomic constraints that plagued the tech sector throughout last year. During the Q4 2022 period, the company realized quarterly net sales of 21.2 billion euros and a gross margin of 50.5%. ASML also raked in a net income of 5.6 billion euros and now projects a 25% growth in 2023 net sales. The tech giant remains optimistic about said net sales growth despite likely new curbs on its exports to China.
ASML President and Chief Executive Officer Peter Wennink commented on the company’s Q4 results, saying:
“For ASML, 2022 was another strong year ending with total net sales for the year of €21.2 billion, gross margin of 50.5%, and a record backlog at the end of 2022 of €40.4 billion.”
Furthermore, Wennink also added:
“We continue to see uncertainty in the market caused by inflation, rising interest rates, risk of recession, and geopolitical developments related to export controls. However, our customers indicate that they expect the market to rebound in the second half of the year. Considering our order lead times and the strategic nature of lithography investments, demand for our systems therefore remains strong.”
ASML Expects Stronger Net Sales Following Sound Q4 2022 Outing
On ASML’s loftier projections for 2023, Wennink stated that the company expects continued strong growth with an over 25% net sales increase. In addition, the Veldhoven-based firm anticipates a marginal gross margin improvement compared to 2022.
ASML previously struggled to meet demand as its top clients Samsung, TSMC, and Intel (NASDAQ: INTC), are all in varying expansive stages.
Wennink explained that despite economic uncertainties weighing heavy on ASML’s 2023 economic outlook, there is a silver lining. According to the CEO, conditions improved towards the end of last year, and China seems to be on the mend now. In conclusion, Wennink opines that demand remains higher than ASML’s production capacity.
ASML had sales in China worth 2.16 billion euros last year, which accounted for 14% of its total revenue. The Chinese market represented the company’s third-largest market behind Taiwan and South Korea.
According to Wennink, ASML’s exports to China have remained unaffected by the US imposition of new restrictions on its own companies. In Wennink’s opinion, the play out of the continuous dialogue between both governments would come to “a reasonable solution” on restrictions.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
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