Tag Archives: smci

Intel Layoff Rumors Circle Amid PC Slump, Data Center Grapple

No. 1 chipmaker Intel ( INTC ) may cut thousands of jobs to buffer its bottom line amid continued PC malaise, according to a report from Oregon Live . The report came as a second analyst in a week cut his price target on Intel stock Sunday in reaction to industry reports of Q1 PC shipment declines and a “dreadful” January for Taiwanese ODMs. Intel is slated to announce its Q1 results late Tuesday. In afternoon trading on the stock market today , Intel stock was up a fraction, trading near 32. Shares dipped severely in January but began to recover by mid-February. As of Friday’s close, Intel stock was down 9% for the year. Summit Research analyst Srini Sundararajan cut his price target on Intel stock to 37 from 38 but reiterated a buy rating. He cited recent reports from industry trackers IDC and Gartner which projected 9.5% and 11.5% year-over-year declines in Q1 PC shipments, respectively. Taiwanese PC makers noted respective 15% and 30% declines in notebook/desktop and motherboard shipments in Q1, Sundararajan wrote in a research report. “We think there will be some effect on Intel in Q1 and Q2 possibly,” he wrote. Pre-announcements from Super Micro Computer ( SMCI ) and Seagate Technology ( STX ) — slated to report earnings April 28 and 29, respectively — show soft demand for the data center and hard disk drive businesses, he wrote. Hard disk drives declined 18% sequentially, Seagate said. That softness will affect Intel, which hangs 60% of its revenue on PC sales. And the data center struggles are particularly concerning. Intel is pushing big into the data center and cloud spaces to diversify from its weakening PC unit. Super Micro Computer guided to $530 million to $533 million in fiscal Q3 sales, well below the midpoint of earlier views for $530 million to $580 million. “Given that a tight correlation exists between Intel’s DCG (data center group) revenues and Super Micro Computer revenues, if we do not see any effect in Q1, we should expect some effect in Q2,” Sundararajan wrote. Intel will likely guide 2016 sales and capital expenditures down, he wrote. Three months ago, Intel modeled mid- to high-single-digit growth for 2016. Sundararajan cut his estimate to $57.1 billion in sales and $2.30 earnings per share, up 3% and down 1%. The consensus models $58.2 billion and $2.36 a share. So far, Intel hasn’t officially announced layoffs internally, according to the Oregon Live report that cited inside sources. The cutbacks could reduce employment in some units by double-digit percentages.

Super Micro Computer Stock Dives, Breakout Fails After Profit Warning

Highly rated small cap Super Micro Computer ( SMCI ) lowered its third-quarter estimates after the close Thursday and then watched its stock crash Friday. Super Micro stock plunged nearly 19% in heavy afternoon trading in the  stock market today , near 27. The stock had made a breakout at 33.89 from a cup-with-handle base, but that breakout has now failed. Scheduled to announce Q3 earnings after the close April 28, Super Micro founder and CEO Charles Liang said late Thursday in a preannouncement that the quarter ended March 31 turned out “weaker than forecast due to weaker demand with some large customers and the channel than we anticipated. January and February were particularly soft, while March showed improved momentum. Storage and data center continued to grow.” Except for the reference to March, there was “little detail on going-forward expectations,” Needham analyst Richard Kugele said in a Thursday research note. “We see great risk to the company’s goal of 20%-plus annual revenue growth and expect the stock will return to the penalty box, at least until further clarity is provided on the April 28 call.” IBD’s Take: Super Micro had been hot, but a breakout failed. How does the stock stack up? Find out at IBD Stock Checkup Kugele, though, said he still likes the company in the long term and that it’s outpacing the broader server/storage market. He reiterated his buy rating and 36 price target on Super Micro. Super Micro said Q3 revenue will come in at $530 million to $533 million instead of $530 million to $580 million. It now sees non-GAAP EPS of 33 cents to 35 cents vs. earlier guidance of 43 cents to 53 cents. Wall Street consensus had been 49 cents minus items, up 4% from the year-earlier quarter, and sales of $557 million, up 18%, Kugele said. Thomson Reuters on Friday cited consensus of six analysts on non-GAAP EPS of 46 cents and of seven analysts on revenue of $552 million. The preannouncement offered no guidance. Thomson Reuters put consensus on the current fiscal Q4 EPS minus items at 66 cents on revenue of $650 million vs. 57 cents on $574 million a year earlier. With an IBD Composite Rating of 98, Super Micro Computer ranks the best among all members of IBD’s Computer-Hardware/Peripherals industry group. But it’s also one of the smallest, with a market cap of $1.35 billion. The largest, Canon ( CAJ ), with a $32.68 billion market cap, carries a 37 CR, followed by newly reorganized HP Inc. ( HPQ ), with a $21.9 7 billion market value and a 47 CR. Canon stock was down a fraction intradayFriday, while HP stock was up a fraction. Image provided by Shutterstock .

Super Micro Earnings Soar As Server Maker Wins Share

Super Micro Computer late Tuesday handily beat fiscal second-quarter estimates as the quick-to-market server maker grabs share from larger rivals. The San Jose, Calif.-based server maker reported an 86% rise in earnings per share minus one-time items, to 65 cents, beating consensus for 47 cents. The gain came on a 41% hike in revenue to $503 million, vs. views for $467.9 million. Super Micro (SMCI) stock rose a fraction in