By Mauro Orru

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

ORDERS FORECAST: The Dutch semiconductor-equipment maker is expected to report orders of 4.84 billion euros ($5.49 billion), according to consensus estimates by Visible Alpha. The forecast is above orders of 3.61 billion euros that ASML reported a year earlier, but below the 7.09 billion euro figure from the fourth quarter of 2024.

ASML's orders can fluctuate significantly between quarters as they are heavily influenced by how much chip makers are willing to spend based on the demand trends they expect. The company said earlier this year that it would stop reporting quarterly orders as of 2026 because the metric doesn't necessarily reflect business momentum.

ASML's extreme ultraviolet lithography systems--used to print the most intricate layers on chips--should contribute 1.58 billion euros in orders.

SALES FORECAST: ASML should post quarterly sales of nearly 7.77 billion euros, according to the consensus, above the 5.29 billion euro figure from a year earlier and within a company guidance range between 7.5 billion euros and 8 billion euros.

GROSS PROFIT FORECAST: Gross profit--a closely watched metric for companies operating in the semiconductor industry--should come in at 4.09 billion euros, according to the consensus, above the 2.70 billion euros that ASML reported a year earlier. ASML's gross margin is expected to have increased to 52.6% from 51%, within company guidance of between 52% and 53%.

NET PROFIT FORECAST: Net profit should amount to 2.28 billion euros compared with 1.22 billion euros in the same period a year earlier.

ASML shares have fallen more than 30% over the past 12 months. The company has been navigating uneven demand trends: Strong appetite for artificial-intelligence chips stands in stark contrast with sluggish demand for legacy semiconductors found in cars, smartphones, laptops and other devices. ASML in October cut its sales forecasts for 2025, saying some areas of the semiconductor industry aside from AI were taking longer than expected to recover.

Meanwhile, Chinese artificial-intelligence company DeepSeek developed AI models that nearly matched American rivals despite using inferior chips, raising questions about the need to spend huge sums on advanced gear to develop powerful AI models.

WHAT TO WATCH:

--GUIDANCE: Analysts and investors will be on the lookout for any remarks from ASML management about its 2025 and 2030 guidance. The company is forecasting between 30 billion and 35 billion euros in sales this year, a range that ASML expects to grow to between roughly 44 billion and 60 billion euros in 2030.

Jefferies analysts wrote in a note to clients that the company could be somewhat optimistic about its 2025 outlook, with sales likely to be in the middle to upper half of the guidance range. However, commentary is likely to be toned down compared to the fourth quarter due to a weakening macroeconomic environment and uncertainty about the strength of the AI supply chain, they said.

--TARIFFS: The chip industry faces a reckoning with President Trump's erratic tariff policies that could weigh on the sector's recovery. Smartphones, computers, memory chips and several other categories of products will be exempt from sweeping tariffs imposed earlier this month. However, Commerce Secretary Howard Lutnick said many tech products will still face separate levies in a month or two as part of an investigation into semiconductors.

Any disruption and uncertainty from tariffs could usher in even weaker demand for legacy chips, weigh on the AI supply chain, and push the sector into a sharper decline, Jefferies analysts said. Tariffs could lead to higher prices for products that rely on semiconductors like cars, smartphones, laptops, AI servers and industrial products, and give way to softening demand in the U.S., the analysts said.

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

(END) Dow Jones Newswires

April 15, 2025 05:25 ET (09:25 GMT)

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