January 11, 2012
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Super Micro Computer (Nasdaq: SMCI ) fell 13% at the opening bell after the company said it would miss fiscal second-quarter forecasts.
So what: Revenue guidance range was cut from $260 million-$280 million down to $249 million-$250 million. Earnings guidance was cut to $0.24-$0.25 from a previous guidance of $0.27-$0.32. The shortfall was blamed of flooding in Thailand and the ensuing effects on the company's supply chain.
Now what: The effect is expected to continue into the first quarter of 2012 and influence the company's ability to capitalize on Intel's (Nasdaq: INTC ) Romley server that will be launched in March. ThinkEquity analyst Rajesh Ghai thinks 10%-20% of the company's supply may be affected, and it's unknown how long the decrease in supply will last. I don't see a reason to rush out and buy shares today, especially after shares have recovered slightly from the opening of the market. I would wait until management updates the situation later this month in its earnings call.
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