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Lam Research and ASML Holdings shares pop after posting robust quarterly results

The relatively strong results for the two companies come in the face of mounting worries about oversupply in the chip sector and sluggish prices

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ASML expects to ship a total of 18 extreme ultraviolet lithography systems this year, which reportedly retail for as much as €100 million

Shares of the chip equipment maker Lam Research (NASDAQ:LRCX) and its Dutch rival ASML Holding NV (NASDAQ:ASML) are picking up traction in Wednesday’s pre-market session after the two companies posted better-than-expected quarterly results along with bullish forecasts.

The strong results for the two companies come in the face of lingering fears about oversupply in the chip sector and falling prices.

In response to the results, Lam Research shares jumped 7% in Wednesday’s pre-market session to $145.27 while ASML shares added 3% to $187.33.

For the fiscal first-quarter, Lam posted net income of $533 million, or $3.23 per share, on sales of $2.33 billion. On an adjusted basis, its earnings came in at $3.36 per share. The results beat the consensus estimate of analysts who had expected the Fremont, California-based company to earn $3.22 per share, but fell short of the Street’s revenue forecast of $2.66 billion.

Looking ahead, for the fiscal second quarter, Lam expects its per-share earnings to range from $3.45 to $3.85 per share and its revenue to fall in the range of $2.35 billion to $2.65 billion, beating Wall Street forecasts.

READ: Micron Technology's valuation still looks attractive for longer-term investors, says Baird analyst

The Dutch semiconductor equipment maker ASML Holding, which is a big supplier to Samsung and Intel, meanwhile, reported that demand for logic and memory chips remained strong in the quarter and will continue to see surging interest through 2019.

“We currently see strong demand for our products in Logic and Memory continuing in 2019, which supports our Logic customers advanced nodes production schedule,” said ASML CEO Peter Wennink in a statement. “In the Memory segment, we see strong momentum continuing, as evidenced by our Q3 order intake.”

For the third quarter, the Dutch company’s net earnings jumped to €680 million, up from €557 million a year ago and zipping past the €671 million forecast by Wall Street analysts. Revenue, meanwhile, climbed to €2.78 billion, up from €2.45 billion.

The total amount of ASML’s net orders came to €2.2 billion, rising from €1.95 billion in the second quarter.

The company also expects to ship a total of 18 extreme ultraviolet lithography systems or EUVs this year and as many as 30 next year. Five EUV machines were also shipped in the third quarter. These machines create more complicated chips and reportedly retail for as much as €100 million.

Going forward, ASML expects fourth quarter net sales of about €3.0 billion and a gross margin of about 48%.

Contact Ellen Kelleher at [email protected]

Quick facts: ASML Holding NV (ADR)

Price: 244.61 USD

NASDAQ:ASML
Market: NASDAQ
Market Cap: $104.12 billion
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