By Mauro Orru

ASML Holding is scheduled to report results for the fourth quarter on Wednesday. Here is what you need to know:

ORDERS FORECAST: The Dutch semiconductor-equipment maker is expected to report orders of 3.99 billion euros ($4.19 billion), according to consensus estimates by Visible Alpha. The forecast is below orders of 9.19 billion euros that ASML reported a year earlier, but analysts argue that volatility between quarters is normal since bookings for ASML's machines hinge on how much chip makers are willing to spend based on the demand trends they see. ASML's extreme ultraviolet lithography systems--used to print the most intricate layers on chips--should contribute 2.26 billion euros in orders.

SALES FORECAST: ASML should post quarterly sales of 9.04 billion euros, according to the consensus, above the 7.24 billion-euro figure from a year earlier and at the high end of company guidance of 8.8 billion to 9.2 billion euros.

GROSS PROFIT FORECAST: Gross profit--a closely watched metric for companies operating in the semiconductor industry--should come in at 4.49 billion euros, according to the consensus, above the 3.72 billion euros that ASML reported a year earlier. ASML's gross margin is expected to have slipped to 49.66% from 51.4%, but the forecast is at the high end of company guidance of 49% to 50%.

NET PROFIT FORECAST: Net profit should amount to 2.63 billion euros compared with 2.05 billion euros in the same period a year earlier.

ASML shares are down nearly 20% over the past 12 months. The stock closed 7% lower on Monday, wiping out more than $15 billion in market value, after Chinese artificial-intelligence company DeepSeek rattled markets. DeepSeek said it had developed AI models that nearly matched American rivals despite using inferior chips, raising questions about the need to spend huge sums on advanced gear provided by the likes of Nvidia and other tech giants to train AI models.

WHAT TO WATCH:

--ORDER MOMENTUM: Following the DeepSeek fallout, analysts at Citi said in a note to clients that they expect investors to focus on ASML's orders, which they estimate at 4 billion euros. However, they cautioned that expectations have reduced based on recent conversations they had, with most investors expecting orders between 3 billion and 4 billion euros.

--Jefferies analysts expect orders of 3.6 billion euros, they wrote in a note to clients. However, they anticipate bookings will climb to a range of 5 billion to 6 billion euros from the first quarter of 2025, citing an increase in bookings from Taiwan Semiconductor Manufacturing Co. as well as the prospect that Samsung Electronics might soon be able to supply its high-bandwidth memory chips to Nvidia as potential boosts for ASML. Morgan Stanley analysts said in a research note that they expect orders of 4.2 billion euros.

--GUIDANCE: ASML already set and recently cut its sales forecasts for 2025, saying that some areas of the semiconductor industry aside from AI were taking longer than expected to recover. The company is currently forecasting between 30 billion and 35 billion euros in sales this year. Morgan Stanley analysts expect the company to confirm its 2025 revenue forecast, with investors' focus shifting to 2026 growth prospects.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

January 28, 2025 10:41 ET (15:41 GMT)

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