Shares of server company Super Micro Computer plunged 11% on Tuesday after the company announced fiscal fourth-quarter earnings that missed analyst expectations.
Super Micro said gross margin dropped to 11.2% from 17% in the year-ago quarter and from 15.5% in the third quarter.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.Super Micro said gross margin dropped to 11.2% from 17% in the year-ago quarter and from 15.
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.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.