Smart Global Holdings (NASDAQ: SGH) reported an 81% dip in adjusted earnings to 34 cents per share for the third quarter of 2019, due to continued weakness in the Brazil business caused by the worsening pricing environment. The bottom-line missed the street consensus of 37 cents per share.
The Brazil business, where the company supplies commodity memory products to high volume requirements in smartphones and PCs, was hurt by the worsening pricing environment for such products.
On a GAAP basis, earnings fell to 8 cents per share in Q3 2019, from $1.37 per share a year ago.
Net sales declined 30% to $235.7 million, which missed the market projection of $265.11 million.
SGH shares tumbled 14% on the disappointing third-quarter results. The stock has fallen 32% in the trailing 12 months.
CEO Ajay Shah said, “As we look forward to our fourth fiscal quarter ending in August, we are forecasting significantly better revenue and earnings performance even though the memory pricing environment remains weak. This is due to improvements in Specialty Memory unit volumes and strength in Specialty Compute.”
Looking ahead, Smart Global expects net sales of $270 to $280 million for fiscal 2019. Adjusted earnings is projected in the range of $0.55 to $0.65.