Fiserv earnings missed by $0.61, revenue fell short of estimates
Investting.com -- ASM International (AS:ASMI) shares rose Wednesday after the Dutch chip equipment maker posted stronger-than-expected third-quarter earnings, with higher margins offsetting weaker orders from China.
ASM reported third-quarter sales of €800 million, 1% above the consensus forecast of €790 million. At constant currencies, revenue was flat from the prior quarter and at the high end of its guidance for a 0%-5% decline. Logic and foundry led sales, followed by memory and power, analog and wafer equipment.
Equipment sales rose 10% year over year at constant currency, while spares and services increased 2% after strong China-driven demand in late 2024.
The normalized gross profit margin reached 51.9%, slightly above 51.8% in the second quarter and 320 basis points ahead of consensus estimates of 48.7%. Gross margin was supported by a favorable product mix and steady Chinese sales.
Excluding purchase price allocation expenses, normalized EBIT totaled €248 million, above the consensus estimate of €212 million and Kepler Cheuvreux’s forecast of €198 million.
The operating margin stood at 30.9%, compared with expectations of 26.8% and 25.1%. Normalized net earnings rose to €206 million from €173 million in the previous quarter, aided by an €11 million foreign exchange gain after a €60 million loss in the second quarter.
Free cash flow was €139 million, including €313 million in cash flow from operations, compared with €242 million a year earlier, largely due to a €100 million earn-out payment linked to the 2022 LPE acquisition.
Bookings totaled €637 million, 11% below consensus and down 7% from the previous quarter and 17% from a year earlier at constant exchange rates, mainly because of lower Chinese demand. The backlog fell to €1.1 billion from €1.3 billion, with a book-to-bill ratio of 0.8.
“Management expects orders to trough in Q4, then recover through 2026,”analysts at Kepler Cheuvreux said, citing 1.4-nanometer pilot line projects, higher DRAM spending and a rebound in silicon-based power and analog markets.
For the fourth quarter, ASM forecast sales between €630 million and €660 million, about 6% below the consensus forecast of €689 million.
The company reaffirmed full-year 2025 sales growth near 10% at constant currency and raised its gross margin target to about 51%, up from the earlier 46%-50% range.
“The main positive was a gross margin revision to 51%, aligning with consensus but exceeding the prior 46-50% target,” Kepler Cheuvreux said.
Revenue from China is expected to decline by double digits in 2026, marking normalization after an exceptional 2024 and early 2025.
The company said it continues to expand in advanced logic and DRAM as adoption of its atomic layer deposition and epitaxy tools increases.
Kepler Cheuvreux described the quarter as “running ahead on earnings, behind on orders.”
The brokerage said “the stock’s 40% rally since September reflects broad sector momentum from AI optimism and deal activity,” but added, “near term, however, we see limited catalysts for the stock to extend gains.”