Strong Chip Growth Driving This Industry Leader
I’ve been waiting to see what ASML Holdings (Nasdaq: ASML) competitor Veeco Instruments (Nasdaq: VECO) would report today, July 26. ASML Holdings reported on July 14, the same day as Intel (Nasdaq: INTC), and I didn’t want to up my target for ASML Holdings simply out of enthusiasm for Intel’s performance. (For more on Intel’s earnings, see this post.)
Two weeks later however, Veeco confirmed strength in the chip manufacturing sector. The company announced earnings that beat Wall Street projections by 18 cents a share and revenue projections by 8%, and then raised guidance for the third quarter.
That confirms the July 14 numbers out of ASML Holdings: Earnings 17% above projections for the second quarter, revenue 8% above expectations, and guidance for fiscal 2010 sales to grow 10% to 15% above historical peak sales. Orders for ASML Holdings lithography equipment, used to etch circuits onto silicon, were 1.18 billion euro in the quarter. That drove the company’s order backlog to 2.4 billion euro as of the end of June.
ASML Holdings was confident enough about growth to predict that it will continue at current levels into 2011. “When we look at the total picture, 2011 bodes very well for ASML,” chief financial officer Peter Wennink said. “Because it’s not a little hump that we’re currently seeing.