Smart Global Holdings Inc (NASDAQ: SGH) stock fell 28.8% on 9th January, 2019 (Source: Google finance) on weak outlook. Looking ahead into the second quarter of fiscal 2019, the company expects net sales in the range of $310 million to $325 million versus the consensus of $3.28 million and non-GAAP earnings of $0.73 to $0.77 per share versus the consensus of $1.32. GAAP EPS is predicted to be in the range of $0.53 to $0.57 and gross margin is projected to be 18% to 20%
Net income for the quarter climbed 48% to $31 million. Brazil continued to be the major contributor to the company’s strong performance and added many new memory products for PC, server and smartphone applications as well as a new polymer cell-based battery product for smartphones. The company’s business in Brazil also met expectations.
SGH in the first quarter of FY 19 has reported the adjusted earnings per share of $1.75, missing the analysts’ estimates for the adjusted earnings per share of $1.77. The company had reported the adjusted revenue growth of 48 percent to $393.9 million in the first quarter of FY 19, beating the analysts’ estimates for revenue of $382.73 million. The results were also driven by solid sequential growth from its new Specialty Compute & Storage Solutions business.
Smart Global remained optimistic about its overall business in the long term. The company expects higher seasonality during the second quarter in its Brazil business. However, other lines of business are predicted to perform at or above its prior forecast in the second quarter
Meanwhile, the company has announced the appointment of Bryan Ingram, Senior Vice President and General Manager of the Wireless Semiconductor Division of Broadcom Inc., to its board of directors and its Compensation Committee. Mr. Ingram currently leads the Wireless Semiconductor Division at Broadcom Inc. and has served in various executive roles for over 13 years, at Broadcom Inc. and its predecessor Avago Technologies Limited, which acquired Broadcom Corp. in 2015. Mr. Ingram also held executive positions at the predecessor to Avago within Agilent Technologies. From 1986 to 1999 Mr. Ingram held various management positions at Hewlett Packard and Westinghouse. With the appointment of Mr. Ingram, the board of SMART Global Holdings now has four independent directors and a total of nine members