Morningstar | ASM International Reports 3Q Results Consistent With Its Peers; Shares Fairly Valued
ASM International reported third-quarter results slightly ahead of our expectations, thanks to solid demand for its atomic layer deposition tools from logic and foundry customers. Despite near-term headwinds, ASM had a strong order intake during the quarter, which should assuage investor concerns of slowing wafer fab equipment spending. As chips become more complex, ASM’s atomic layer deposition tools offer more precise processing and superior control for the finer feature sizes that chipmakers must construct, when compared with traditional deposition tools. However, larger peers such as Lam Research have also been aggressively targeting the ALD market, which could limit ASM’s growth prospects. Despite the 11% uptick in shares following the earnings release, we think shares of no-moat ASM are fully valued relative to our unchanged fair value estimate of EUR 42.Third-quarter revenue was EUR 195.7 million, down 6% sequentially due to weakness in memory (NAND). Orders (EUR 258 million) rose 47% sequentially surpassing record levels during the first quarter, with foundry being the largest segment, thanks to ALD orders supporting work in 7-nanometer and early work in 5-nm. Within memory, DRAM accounted for the majority of bookings, as NAND slowed following a recent streak of solid demand. Gross margins fell 120 basis points to 40.9% versus the prior quarter because of a less favorable product mix with new products that initially have higher installation costs. Management guided fourth-quarter revenue to be at a midpoint of EUR 235 million, which implies 8% full-year top-line growth.
ASM International is an equipment supplier mainly to the semiconductor manufacturing industry. Co. designs, manufactures and sells equipment and services to its customers for the production of semiconductor devices, or integrated circuits. Co.'s front-end segment manufactures and sells equipment used in wafer processing, encompassing the fabrication steps in which silicon wafers are layered with semiconductor devices. Co.'s back-end segment manufactures and sells equipment and materials used in assembly and packaging, encompassing the processes in which silicon wafers are separated into individual circuits and subsequently assembled, packaged and tested.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.