Super Micro’s Struggles Continue: Sales Forecast Falls Short, Shares Plummet
The embattled server maker Super Micro Computer Inc. has once again disappointed investors, providing a sales forecast that fell short of analysts’ estimates. The company’s shares took a hit, dropping about 14% in extended trading.
Accounting Issues Persist
Super Micro has been struggling to file its official financial statements for its previous fiscal year, missing an August deadline. The company’s auditor, Ernst & Young LLP, resigned last week, citing concerns about governance and transparency. An investigation by a special board committee found no evidence of fraud or misconduct, but the damage has already been done.
Revenue Projections Fall Short
Super Micro expects revenue to be $5.5 billion to $6.1 billion in the quarter ending in December, significantly lower than the $6.79 billion projected by analysts. Profit, excluding some items, is expected to be 56 cents to 65 cents per share, compared to the 80 cents anticipated by analysts.
Semiconductor Availability Hurts Sales
According to CEO Charles Liang, sales were hurt in the fiscal first quarter due to the availability of semiconductors. Despite this, Liang expressed confidence in the company’s relationship with Nvidia Corp., the top producer of powerful processors for artificial intelligence.
Turbulent Year Takes Its Toll
Super Micro has had a tumultuous year, with shares rising at the start of 2024 due to AI-fueled demand for its high-powered machines. However, scrutiny intensified after a former employee alleged that the company had sought to overstate its revenue. The failure to file its 10-K financial disclosure and the departure of E&Y has put the company at risk of being delisted by Nasdaq Inc. and booted from the index.
Investors Disappointed
Tuesday’s update was an opportunity for Super Micro to ease investor fears, but instead, investors appeared disappointed with the results. The shares fell to a low of $22.52 after closing at $27.70 in New York.
Uncertainty Ahead
Super Micro’s inability to provide timing for when it will file its 10-K increases the likelihood of a Nasdaq delisting, posing a major overhang. The company said it “continues to work diligently” on the financial filing delays and continues to stand by previously issued disclosures, but can’t predict when the delayed form will be filed.
Preliminary Results
For the quarter that ended in September, Super Micro said preliminary results show sales of $5.9 billion to $6 billion, lower than the $6.47 billion estimated by analysts. Profit, excluding some items, was about 76 cents per share, slightly higher than the 74 cents expected by analysts. However, these results could change upon review by a new accounting firm.
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