Data center News
Supermicro Cuts Sales Guidance By $30M Due To Coronavirus Pandemic
“While efforts to halt the spread of COVID-19 impacted our operations during the quarter, we continue to operate with an abundance of caution and expanded safety precautions,” said Supermicro CEO Charles Liang.
Supermicro has lowered its third fiscal quarter revenue guidance by roughly $30 million from around $800 million to around $770 million due to the economic impact of the coronavirus pandemic.
The San Jose, Calif.-based storage, server and high-performance computing (HPC) specialist previously projected revenues for its third fiscal quarter 2020, which ended March 31, to fall between $770 million to $830 million. Supermicro now believes that total sales for its third quarter were in the range of $755 million to $785 million.
“While efforts to halt the spread of COVID-19 impacted our operations during the quarter, we continue to operate with an abundance of caution and expanded safety precautions,” said Charles Liang, Supermicro’s chairman and CEO, in a statement. “Looking ahead, with a strong balance sheet and healthy levels of liquidity, we look to appropriately prioritize and capitalize on any opportunities leveraging our US, Taiwan, and other global facilities. We remain excited about our product solutions targeting the cloud, artificial intelligence, 5G and edge, and the evolving needs of the enterprise.”
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Supermicro generated total sales of approximately $3.5 billion in its fiscal year 2019, which ended June 30, 2019. As of March 31, the company has $285 million in net cash and equivalents.
The coronavirus pandemic has drastically affected the IT world from event cancellations or postponements to supply chain shortages and revenue declines.
This week, market research firm IDC cut its worldwide IT spending forecast significantly. In January, IDC initially projected global IT spending to increase 5.1 percent in 2020 compared to 2019. However, due to the coronavirus pandemic, the research firm is now projecting a year-over-year decrease in IT spending of 2.7 percent in 2020.
Supermicro specializes in server, storage, HPC and converged infrastructure. IDC said the coronavirus will hit the worldwide server and storage market hard this year. The research firm is predicting worldwide external enterprise storage revenues to drop 5.5 percent in 2020 year over year to $28.7 billion, while global server sales will decline 3.4 percent to $88.6 billion.
Supermicro’s Liang said his company has taken all the recommended actions to protect the health and safety of its employees, partners and community.
“I want to thank our loyal employees, partners and customers during this challenging time,” said Liang.