Fitch affirms ASML

Fitch Ratings said its positive outlook on ASML Holdings NV's BB- long-term rating is further supported by a strong set of fourth-quarter fiscal 2005 and full-year results.

Amid tough market conditions - with wafer fabrication equipment spending down by 9% - ASML experienced increased revenues and strong growth in earnings, the agency said. An operating margin of 17.8% was a full 2.4% ahead of 2004, reflecting strong average selling prices and ongoing progress in cost containment. The company shipped some 30% fewer units in the year, but has an €15.1 million order backlog for first half of fiscal 2006.

Fitch said the BB- rating takes into account the volatility of the capital equipment cycle, the fact that semiconductor markets are not expected to peak before 2008 and the company's relatively weak performance through the last down-cycle.

The agency recognizes however, the company's much improved fundamentals, underlined by its improved cost structure, leading edge technology and dominant industry position. A net cash position of €1 billion adds further underlying support for the rating.

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