Networking and communication device maker Super Micro Computer (SMCI) become a casualty of Thailand floods as a result of constraints in hard disc drive supply chain. The company disclosed that it could not meet customer demand and failed to achieve its own quarterly targets following the supply constraints. Predictably, the news has dragged down its stock in the extended hours of trading.
The company now expects adjusted earnings to 24 – 25 cents a share, down from its own guidance of 27 – 32 cents a share. The revenue outlook has also been reduced to $249 - $250 million from its earlier forecast of $260 - $280 million.
But the saving grace is that its adjusted gross margin is expected to be about 17 percent and Super Micro Computer attributed higher margins to product mix.
Wall Street analysts are estimating the company to earn 29 cents a share on revenues of $272.3 million, indicating revenue upside of 13.1 percent.
The company also expects higher operating costs of $2.6 - $2.7 million for the second quarter than its first quarter due to research and development costs in advance of upcoming product launches and costs incurred for expansion of its base in the U.S. and overseas.
Commenting on the current situation, Super Micro Computer chief executive officer Carles Liang said, "During the quarter, we continued to invest in R&D and are now able to offer the broadest product offering in the industry for the Sandybridge launch later this quarter. Also, we opened our new Taiwan facility which will lower our cost, and improve business efficiency and speed to deliver products to our customers. We also expanded our warehouse and R&D facility capacity in the USA. Demand for our products is strong and we are excited about our strong position especially when HDD supply recovers and Sandybridge is launched. We will provide more details on the second quarter financial performance at the time of our earnings call later this month."
The company will announce its second quarter results on January 24 after market closes.
