ASML Discontinues New Order Bookings Disclosure to Stabilize Share Price
ASML, a leading manufacturer of semiconductor equipment, has announced the discontinuation of publishing its highly scrutinized quarterly metric: new order bookings. The decision stems from concerns that the metric's volatility has led to excessive stock price fluctuations.
ASML emphasizes that its own forecasts, based on discussions with chipmakers regarding their capacity plans, provide a more accurate representation of future demand. New orders can have long fulfillment lead times, making their interpretation within quarterly results challenging.
The company's CFO, Roger Dassen, noted the significant swings caused by this factor. Analysts have expressed mixed reactions to the decision. While understanding the reasons, some regret the loss of transparency. However, they agree that in isolation, new order bookings may not accurately reflect the long-term health of the business.
In the fourth quarter of 2022, ASML's bookings surged to €7.1 billion compared to €2.6 billion in the previous quarter. This discrepancy is attributed to timing differences in orders from TSMC, a major chip producer.
ASML's stock performance in 2024 demonstrates the volatility caused by new order bookings. Shares soared by over 30% but subsequently erased all gains. Dassen emphasized that the company's full-year sales and margins aligned with forecasts made in January.
In conclusion, ASML's decision to discontinue disclosing new order bookings aims to reduce volatility in its share price. The company believes its forecasts provide a more reliable indicator of future performance.