Read: Okta Q3 earnings review
In specialty memory products and Brazil products, Smart Global primarily competes against global and local memory module providers and large semiconductor memory IC manufacturers that utilize a portion of their capacity to manufacture memory modules. The stiff competition in the industry has been stealing away the customers from the company.
The weak demand for memory solutions, products, and related service offerings in current markets including Brazil are likely to hurt the results for the first quarter. The company is also expected to face hindrances in the SCSS business unit including its Smart EC and Smart Wireless.
The bottom line will be hurt by its investments in research and development projects, enhancements to sales and marketing efforts, integration of acquisitions, and expenditure related to the operation of its business. Also, competitors will continue to improve the performance of their current products, lower prices and introduce new products, which could lower sales.
Analysts expect the company’s earnings to plunge by 58.30% to $0.73 per share and revenue will drop by 29% to $280.02 million for the first quarter. The company has missed analysts’ expectations thrice in the past four quarters. For the first quarter, the company expects net sales of $275-285 million, GAAP earnings of $0.30-0.40 per share, and adjusted earnings of $0.68-0.78 per share.
For the fourth quarter, Smart Global Holdings posted an 81% dip in earnings due to lower revenues. The results were below its previous guidance primarily due to weakness in its supply chain services business, which is reported as part of Specialty Memory Products.
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