ASML Holding (ASML 2.04%) stock fell 4.2% through 11:40 a.m. ET after the maker of semiconductor chip manufacturing equipment reported mixed earnings in its Q3 earnings Wednesday morning.

Heading into Q3, analysts had forecast ASML would earn about $4.85 per share on sales of $7.1 billion. As it turned out, ASML's revenues came in just under 6.7 billion euros (a little more than $7 billion, so a "miss" on sales). On the other hand, ASML earned 4.81 euros for the quarter, which works out to $5.08 -- resulting in a "beat" on earnings.    

Is ASML's earnings beat as good as it seems?

Investors aren't exactly thrilled with ASML's results, and they're not entirely wrong to be disappointed. Sales grew nearly 25% in comparison to last year's Q3, which is a great start, and gross profits margins inched up 10 basis points. However, rising operating costs resulted in an 80-basis point decline in the operating profit margin, and ASML's net profit margin fell one full percentage point (100 basis points).

As a result, even though ASML "beat" on earnings, its earnings grew much slower than its sales, climbing only 20% year over year.

What happens next at ASML?

Worse, ASML noted that its net bookings (a proxy for future revenue growth) were only 2.6 billion euros in Q3 -- less than half the company's 6.7 billion euros in sales. And with new orders not coming in nearly fast enough to replace orders going out the door, this implies that ASML is looking at a sharp slowdown in sales at some point.

In that regard, CEO Peter Wennink confided that "the semiconductor industry is currently working through the bottom of the cycle, and our customers expect the inflection point to be visible by the end of this year." With customers "uncertain" about near-term demand for semiconductor chips, they're apparently holding off on ordering a lot of new equipment to build chips that they might not be able to sell -- which makes sense.

The good news is that ASML still has plenty of work to do, and expects sales to keep on growing through Q4 2023 -- to perhaps as much as 7.1 billion euros ($7.5 billion). The bad news is that we don't yet know how 2024 is going to look -- but judging from Q3 bookings, it's probably not going to look great.

And that is why investors are selling ASML stock today.