By Toby Sterling
AMSTERDAM (Reuters) -ASML Holding NV, a key supplier to computer chip makers, posted slightly better-than-expected quarterly net income of 1.74 billion euros ($2 billion) on Wednesday, amid strong demand for its products and a global semiconductor shortage.
Analysts had forecast a net income of 1.6 billion euros for the third quarter ended Sept. 30, according to Refinitiv data.
Revenue came in at 5.24 billion euros. In the third quarter of 2020, ASML had reported a net income of 1.1 billion euros on revenue of 3.96 billion euros.
"Demand continues to be high," Chief Executive Officer Petter Wennink said in a statement.
Digital transformation and chip shortages fuel the need to increase capacity to meet the current and expected future demand for both logic and memory chips, Wennink said.
ASML dominates the market for lithography systems, machines that cost up to 150 million euros each and that use focused beams of light to help create the circuitry of semiconductors.
The company on Wednesday forecast fourth-quarter sales of 4.9-5.2 billion euros at a gross margin of 51%-52%. Wennink repeated the company's full-year target of 35% sales growth.
At a meeting with investors in September, the company said it was benefiting from "megatrends" in the electronics industry and also raised its long-term forecasts, estimating full-year revenue would hit 24-30 billion euros ($28 billion-$35 billion) in 2025, with gross margins of up to 55%.
The company is expanding its capacity as semiconductor makers expand theirs to address the global chip shortage. Key customers include all major chip makers such as TSMC, Samsung and Intel.
ASML's stock has reflected the strong outlook with a market capitalisation of around 280 billion euros, making it Europe's largest technology company.
Shares closed at 683 euros in Amsterdam on Tuesday, and have outperformed the sector with a 72% year-to-date jump.
($1 = 0.8585 euros)
(Reporting by Toby Sterling; Editing by Jacqueline Wong and Subhranshu Sahu)