Super Micro announces 10-for-1 stock split, shares plunge 13% on earnings miss

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Shares
of
server
company

Super
Micro
Computer
plunged
13%
on
Tuesday
after
the
company

announced
fiscal
fourth-quarter
earnings
that
missed
analyst
expectations.
The
company
also
announced
a
10-for-1
stock
split,
set
to
begin
trading
on
a
split-adjusted
basis
on
Oct.
1.

Here’s
how
the
company
did
vs.
LSEG
estimates
for
the
quarter
that
ended
in
June:

Earnings:
$6.25
adjusted
vs.
$8.07
expected
Revenue:
$5.31
billion
vs.
$5.30
billion
expected

Super
Micro
said
gross
margin
dropped
to
11.2%
from
17%
in
the
year-ago
quarter
and
from
15.5%
in
the
third
quarter,
which
means
it’s
making
less
profit
on
each
product
it
sells,
despite
noting
that
it
“continues
to
experience
record
demand
of
new
AI
infrastructures.”

The
company
announced
net
income
of
$352.7
million,
or
$5.51
per
share,
up
from
$193.5
million,
or
$3.43
per
share,
in
the
year-ago
quarter.

Super
Micro
said
it
expects
first-quarter
revenues
between
$6
billion
and
$7
billion,
beating
Wall
Street’s
estimate
of
$5.46
billion.
It
expects
EPS
of
$5.59
to
$8.27,
or
a
$7.48
midpoint,
compared
to
the
consensus
estimates
of
$7.58.

Shares
in
the
company,
which
competes
with
companies
like

Dell
and

Hewlett
Packard
Enterprise,
have
surged
over
recent
years
as
investors
bet
it
will
be
an
essential
vendor
of
servers
for

Nvidia,
whose
graphics
cards
are
powering
the
artificial
intelligence
boom.

Stock
splits
do
nothing
to
change
the
financial
fundamentals
of
a
company
but
they
do
make
each
share
cheaper,
which
can
have
a
positive
psychological
effect
on
retail
investors.