NINOY Nikon Corp (PK)

Dutch semiconductor-equipment maker ASML Holding NV (ASML.AE) Wednesday posted a better-than-expected rise in third-quarter profit, reiterated that it expects full-year sales to be 10% to 15% above their historical peak, and said it has orders booked for delivery in 2012.

ASML, the world's largest maker of lithography systems that map out electronic circuits on silicon wafers, reported its best quarter ever, and said it expects fourth-quarter sales of around EUR1.3 billion and 2010 sales around EUR4.3 billion, as it kicked off the technology earnings season in Europe.

Despite some tech companies cutting their guidance in recent weeks, including chip makers Intel Corp. (INTC) and Advanced Micro Devices Inc. (AMD) ASML Chief Financial Officer Peter Wennink said ASML's customers have very positive cash flows and are making both strategic and capacity investments in their chip making equipment.

Wennink, in a video interview on the firm's website Wednesday confirmed 2010 sales will be "historic, around EUR4.3 billion."

"We will end 2010 with a record backlog. That is a good starting point, 2011 has the potential to be another growth year," he said. He also said ASML will announce a dividend payment in the fourth quarter, to be paid next year.

ASML said net profit was EUR268.5 million in the quarter ended Sept. 30, from EUR20 million in the same period a year earlier when demand fell as customers trimmed stocks and manufacturers adjusted production capacity as a result of the global economic slump. ASML reported EUR239 million net profit in the second quarter.

"We booked EUR1,297 million worth of systems in the third quarter of 2010 and expect bookings in the fourth quarter to exceed the third quarter level, confirming our potential for 2011 sales growth," said Eric Meurice, chief executive of the Veldhoven, Netherlands-based company.

"This expectation of strong and continuous structural demand for our products, notwithstanding mixed signals of less bullish growth of personal computer demand and memory price declines, is supported by the current sustained bit growth trends for DRAM and flash memory chips as well as the continued strategic investments by all foundry chip manufacturers," said Meurice.

ASML, which has a global market share of around 70% and competes with Canon Inc. (CAJ) and Nikon Corp. (NINOY), said that it has orders agreed with customers for eight systems that are due to start shipping in 2012 and that it is also negotiating for additional orders to be closed in the fourth quarter.

Third-quarter sales more than doubled to EUR1.78 billion from EUR555 million in the same quarter a year ago and up from EUR1.07 billion in the second quarter. ASML's results beat analysts' expectations for net profit of EUR245.8 million on sales of EUR1.2 billion, according to a FactSet survey.

The results were better than expected and fourth-quarter sales guidance is in line, said Kepler analyst Peter Olofsen, with a hold rating on the stock. He said order intake will likely peak in the fourth quarter.

ASML, whose equipment makes flash memory chips used in smartphones, digital cameras and computers, counts Intel Corp. (INTC), Samsung Electronics Co. Ltd. (SSNHY) and Taiwan Semiconductor Manufacturing Co.(2330.TW) among its customers.

Overnight, Intel posted a 59% jump in third-quarter earnings and issued upbeat comments about technology spending, allaying fears of a sharp slowdown in computer demand.

ASML shares closed Tuesday at EUR22.09.

-By Roberta B. Cowan; Dow Jones Newswires; +3120-571-5200; roberta.cowan@dowjones.com

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