Shares of critical chip firm ASML drop 5% as sales miss expectations with 22% fall

Shares of ASML on Wednesday fell as the company missed sales forecasts, but stuck to its full-year outlook.

ASML's stock was down around 4.5% in early European trade after the results.

Here's how ASML did versus LSEG consensus estimates:

Net sales fell 21.6% year-on-year while net income dropped 37.4%. ASML's net sales fell in the middle point of the company's guidance.

Net bookings for ASML's machinery, a closely watched booking, totaled 3.6 billion euros in the first quarter, down 4% year-on-year but plunging nearly two thirds versus the December quarter.

ASML is one of the most important semiconductor firms in the world, producing tools known as extreme ultraviolet lithography machines, which are required to manufacture the most advanced chips globally.

Last year, weak demand for consumer electronics such as smartphones and laptops hit chipmakers that produce semiconductors for those devices. That has in turn led to slightly weaker call for ASML's gear.

However, various semiconductor firms across the board, such as memory chipmaker Samsung, are seeing a rebound in demand.

"ASML's latest financial results were not the numbers many investors had been hoping for or expecting. After an excellent Q4 orders, Q1 orders were expected to shrink due to their lumpy nature, but the amount that they fell was worse than expectations and could potentially be an early warning sign for concern," Ben Barringer, technology analyst at Quilter Cheviot, said in a note on Wednesday.

"There a number of factors at play; the economic environment is still incredibly uncertain and thus customers are not ordering in the same quantities as they have done previously; there is a transition in product in 2025 so some may just be holding off and preserving any