ASML Holding N.V. (ASML) stock is higher today after the company, a global manufacturer of photolithography systems used in semiconductors, announced earnings for the fourth quarter and full year of 2021.
The company reported fourth quarter net sales of €5.2 billion and full year net sales of €18.6 billion.
Full year net sales were up over €4 billion from fiscal year 2020, while net bookings jumped around €15 billion from the previous year.
Consumer Demand
ASML's strong full year results are due in large part to the rebound in the semiconductor industry and the rising consumer demand that fueled growth as the economy opened up.
ASML President and CEO Peter Wennink, commented, "We experienced higher demand for our systems than our production capacity can accommodate. Very strong demand in end markets puts pressure on our customers for more wafer output."
"In order to support our customers, we are providing them with high-productivity upgrade solutions for their installed base, and we are reducing cycle time in our factory to ship more systems."
The company's new testing process will mean a faster shipping timeline for customers, but also entails that revenue is not recognized until the customer fully approves the product.
Looking Ahead
ASML expects first quarter 2022 net sales between €3.3 billion and €3.5 billion and a gross margin of around 49%.
The company stated that approximately €2 billion worth of sales that are expected to ship in the first quarter are not included in the first quarter estimate due to the new customer approval process.
This means that the revenue will be recognized in subsequent quarters after formal customer acceptance tests are completed in the field.
Winning added, "Looking at the full year – even taking into account our current expectation of fast-shipment-related revenue shifts of six EUV systems into 2023 – we expect a revenue growth of around 20%."
