Super Micro Stock Split Leads to 13% Drop After Earnings Miss

Shares of Super Micro Computer experienced a significant decline of 13% on Tuesday after the company reported fiscal fourth-quarter earnings that fell short of analyst expectations. The company also announced a 10-for-1 stock split, which is set to take effect on October 1. For the quarter ending in June, Super Micro reported adjusted earnings of $6.25 per share, compared to the expected $8.07, while revenue slightly exceeded expectations at $5.31 billion against a forecast of $5.30 billion. The company’s gross margin saw a notable decrease, dropping to 11.2% from 17% in the same quarter last year and from 15.5% in the previous quarter. This decline indicates that Super Micro is earning less profit on each product sold, despite reporting "record demand" for new AI infrastructures. The net income for the quarter was $352.7 million, or $5.51 per share, a substantial increase from $193.5 million, or $3.43 per share, in the prior year. Looking ahead, Super Micro anticipates first-quarter revenues between $6 billion and $7 billion, surpassing Wall Street's estimate of $5.46 billion. The company projects earnings per share (EPS) between $5.59 and $8.27, with a midpoint of $7.48, slightly below the consensus estimate of $7.58. Despite the recent stock drop, Super Micro's shares have surged 246% in 2023 and are up 117% year-to-date, closing at $618.94 on Tuesday. The stock split is expected to make shares more accessible to retail investors, although it does not alter the company's financial fundamentals.