ReportWire

Tag: estimates

  • Super Micro gives margin, profit forecasts below estimates; shares tumble

    Super Micro gives margin, profit forecasts below estimates; shares tumble

    By Arsheeya Bajwa

    (Reuters) -Super Micro Computer reported quarterly adjusted gross margin below estimates on Tuesday, as high costs tied to the production of servers with the latest AI chips weighed on profits, sending its shares down 14% and dragging chipmakers.

    Its shares, which have more than doubled this year on expectations of booming AI computing demand, swung wildly after announcements of the results and a stock split. They initially jumped 12% in extended trading before reversing course.

    Nvidia shares, which rose 3% in trading after the bell, reversed course and fell 2%. Shares of Arm Holdings and AMD fell 2.1% and 1.2%, respectively, while those of rival Dell Technologies were down about 5%.

    AI-related stocks have come under immense pressure following a relentless rally for most of this year, amid worries about the high cost of building new data centers and other infrastructure to power the new technology.

    The company also forecast profit below Wall Street targets but estimated first-quarter and annual sales above estimates.

    “The initial aftermarket reaction was better than I thought it would be,” Running Point Capital Chief Investment Officer Michael Ashley Schulman said.

    “The focus must have been on the higher-than-expected 2025 estimates, but as you dig through the numbers, all the actual misses and especially the much lower-than-expected gross margin may make portfolio managers question whether management can effectively and efficiently scale to handle the growth.”

    CEO Charles Liang said on a conference call with analysts that margins would return to a normal range before the end of fiscal 2025. The company reiterated its gross margin target of a range of 14% to 17%.

    The company’s fourth-quarter adjusted gross margin was 11.3%, compared with analysts’ average estimate of 14.1%, according to LSEG data.

    Competitive pricing also impacted gross margin, CFO David Weigand said on the call. The company has resorted to lowering prices for its servers to stave off competition from rivals like Dell and HP Enterprise .

    Super Micro expects adjusted profit between $6.69 to $8.27 per share for the first quarter, the midpoint of which is below estimates of $7.58.

    Analysts have questioned the company’s hefty spending on supporting new generation of AI chips, such as those sold by Nvidia.

    The company is also grappling with higher supply chain costs and a tight supply of key components, CFO Weigand said.

    Super Micro expects net sales between $6 billion to $7 billion for the first quarter, compared to analysts’ average estimate of $5.46 billion, according to LSEG data.

    Analysts also peppered executives with questions over potential delays in shipments of Nvidia’s latest Blackwell processors. CEO Liang said the overall impact from a possible delay “should not be too much.”

    (Reporting by Arsheeya Bajwa in Bengaluru, additional reporting by Akash Sriram in Bengaluru and Noel Randewich in Oakland, California; Editing by Anil D’Silva)

    Source link

  • Occidental Petroleum beats profit estimates as production rises

    Occidental Petroleum beats profit estimates as production rises

    (Reuters) -U.S. oil and gas producer Occidental Petroleum beat estimates for fourth-quarter profit on Wednesday, aided by higher production in the Permian basin and Rocky mountains.

    U.S. crude oil production has been on the rise, as companies focus on the most prospective sites and drilling efficiency.

    The company reported fourth-quarter production of 1.234 million barrels of oil equivalent per day (boepd), compared with 1.227 million boepd in the year-earlier quarter.

    The uptick in production helped offset a decline in prices. Its average realized price for oil decreased by about 2% from the prior quarter to $78.85 per barrel.

    Its production from the Permian basin, spread across Texas and New Mexico, also rose 4.1% to 588,000 boepd, during the reported quarter. The output from the basin is expected to rise further this year, after the company closes its acquisition of smaller rival CrownRock.

    Excluding CrownRock, the company forecast first-quarter production in the range of 1.16 to 1.20 million boepd, while its 2024 production is expected to be between 1.22 and 1.28 million boepd.

    Its net capital expenditure in 2024 is expected to be between $6.4 billion and $6.6 billion, with $600 million going to its low carbon business.

    The Houston, Texas-based company reported adjusted earnings of 74 cents per share for the quarter ended Dec. 31, compared with analysts’ estimates of 71 cents per share, according to LSEG data.

    Occidental said it has raised its quarterly dividend by 22% to 22 cents per share.

    (Reporting by Sourasis Bose in Bengaluru; Editing by Anil D’Silva and Shinjini Ganguli)

    Source link

  • Palantir forecasts strong 2024 profit on robust AI demand

    Palantir forecasts strong 2024 profit on robust AI demand


    By Arsheeya Bajwa

    (Reuters) – Palantir Technologies forecast a full-year profit above Wall Street estimates on Tuesday, as the data analytics company benefits from strong demand for its artificial intelligence offerings.

    Enterprises are looking to build and deploy their own AI-backed offerings, helping demand for Palantir’s products including its Artificial Intelligence Program, which CEO Alex Karp sees as the “future” of the company.

    Palantir signed 103 deals of over $1 million each in the fourth quarter, Chief Revenue Officer Ryan Taylor told Reuters.

    U.S. commercial revenue in the quarter ended Dec. 31 surged 70% to $131 million, compared with a 12% increase a year earlier.

    The company said it expects 2024 U.S. commercial revenue above $640 million, projecting growth of at least 40%, compared with a 36% rise in 2023.

    Fourth-quarter commercial revenue stood at $284 million, beating analysts’ average estimate of $270 million, according to LSEG data.

    The company reported quarterly revenue of $608.4 million above estimates, and a record profit of $93.4 million.

    However, growth at its mainstay government segment, which contributed more than half of total fourth-quarter revenue, has continued to slow. Government revenue grew 11% compared with a 23% jump a year earlier.

    Analysts have flagged uncertainty in the recognition of revenue from government deals, citing “lumpiness of government contracts” as revenue from such deals likely shows up in the company’s books without much consistency.

    Last month, Palantir entered into an agreement with the Israeli Defense Ministry to provide technology as the war in Gaza continues.

    On an adjusted basis, the company forecast 2024 profit between $834 million and $850 million, above LSEG estimates of $658.8 million. Its revenue forecast was in line with estimates.

    But its current-quarter revenue forecast was below estimates. Revenue chief Taylor attributed this to seasonal weakness in the first three months of the year.

    (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shinjini Ganguli)



    Source link

  • The ‘End’ of COVID Is Still Far Worse Than We Imagined

    The ‘End’ of COVID Is Still Far Worse Than We Imagined

    When is the pandemic “over”? In the early days of 2020, we envisioned it ending with the novel coronavirus going away entirely. When this became impossible, we hoped instead for elimination: If enough people got vaccinated, herd immunity might largely stop the virus from spreading. When this too became impossible, we accepted that the virus would still circulate but imagined that it could become, optimistically, like one of the four coronaviruses that cause common colds or, pessimistically, like something more severe, akin to the flu.

    Instead, COVID has settled into something far worse than the flu. When President Joe Biden declared this week, “The pandemic is over. If you notice, no one’s wearing masks,” the country was still recording more than 400 COVID deaths a day—more than triple the average number from flu.

    This shifting of goal posts is, in part, a reckoning with the biological reality of COVID. The virus that came out of Wuhan, China, in 2019 was already so good at spreading—including from people without symptoms—that eradication probably never stood a chance once COVID took off internationally. “I don’t think that was ever really practically possible,” says Stephen Morse, an epidemiologist at Columbia. In time, it also became clear that immunity to COVID is simply not durable enough for elimination through herd immunity. The virus evolves too rapidly, and our own immunity to COVID infection fades too quickly—as it does with other respiratory viruses—even as immunity against severe disease tends to persist. (The elderly who mount weaker immune responses remain the most vulnerable: 88 percent of COVID deaths so far in September have been in people over 65.) With a public weary of pandemic measures and a government reluctant to push them, the situation seems unlikely to improve anytime soon. Trevor Bedford, a virologist at the Fred Hutchinson Cancer Center, estimates that COVID will continue to exact a death toll of 100,000 Americans a year in the near future. This too is approximately three times that of a typical flu year.


    I keep returning to the flu because, back in early 2021, with vaccine excitement still fresh in the air, several experts told my colleague Alexis Madrigal that a reasonable threshold for lifting COVID restrictions was 100 deaths a day, roughly on par with flu. We largely tolerate, the thinking went, the risk of flu without major disruptions to our lives. Since then, widespread immunity, better treatments, and the less virulent Omicron variant have together pushed the risk of COVID to individuals down to a flu-like level. But across the whole population, COVID is still killing many times more people than influenza is, because it is still sickening so many more people.

    Bedford told me he estimates that Omicron has infected 80 percent of Americans. Going forward, COVID might continue to infect 50 percent of the population every year, even without another Omicron-like leap in evolution. In contrast, flu sickens an estimated 10 to 20 percent of Americans a year. These are estimates, because lack of testing hampers accurate case counts for both diseases, but COVID’s higher death toll is a function of higher transmission. The tens of thousands of recorded cases—likely hundreds of thousands of actual cases every day—also add to the burden of long COVID.

    The challenge of driving down COVID transmission has also become clearer with time. In early 2021, the initially spectacular vaccine-efficacy data bolstered optimism that vaccination could significantly dampen transmission. Breakthrough cases were downplayed as very rare. And they were—at first. But immunity to infection is not durable against common respiratory viruses. Flu, the four common-cold coronaviruses, respiratory syncytial virus (RSV), and others all reinfect us over and over again. The same proved true with COVID. “Right at the beginning, we should have made that very clear. When you saw 95 percent against mild disease, with the trials done in December 2020, we should have said right then this is not going to last,” says Paul Offit, the director of the Vaccine Education Center at Children’s Hospital of Philadelphia. Even vaccinating the whole world would not eliminate COVID transmission.

    This coronavirus has also proved a wilier opponent than expected. Despite a relatively slow rate of mutation at the beginning of the pandemic, it soon evolved into variants that are more inherently contagious and better at evading immunity. With each major wave, “the virus has only gotten more transmissible,” says Ruth Karron, a vaccine researcher at Johns Hopkins. The coronavirus cannot keep becoming more transmissible forever, but it can keep changing to evade our immunity essentially forever. Its rate of evolution is much higher than that of other common-cold coronaviruses. It’s higher than that of even H3N2 flu—the most troublesome and fastest-evolving of the influenza viruses. Omicron, according to Bedford, is the equivalent of five years of H3N2 evolution, and its subvariants are still outpacing H3N2’s usual rate. We don’t know how often Omicron-like events will happen. COVID’s rate of change may eventually slow down when the virus is no longer novel in humans, or it may surprise us again.

    In the past, flu pandemics “ended” after the virus swept through so much of the population that it could no longer cause huge waves. But the pandemic virus did not disappear; it became the new seasonal-flu virus. The 1968 H3N2 pandemic, for example, seeded the H3N2 flu that still sickens people today. “I suspect it’s probably caused even more morbidity and mortality in all those years since 1968,” Morse says. The pandemic ended, but the virus continued killing people.

    Ironically, H3N2 did go away during the coronavirus pandemic. Measures such as social distancing and masking managed to almost entirely eliminate the flu. (It has not disappeared entirely, though, and may be back in full force this winter.) Cases of other respiratory viruses, such as RSV, also plummeted. Experts hoped that this would show Americans a new normal, where we don’t simply tolerate the flu and other respiratory illnesses every winter. Instead, the country is moving toward a new normal where COVID is also something we tolerate every year.

    In the same breath that President Biden said, “The pandemic is over,” he went on to say, “We still have a problem with COVID. We’re still doing a lot of work on it.” You might see this as a contradiction, or you might see it as how we deal with every other disease—an attempt at normalizing COVID, if you will. The government doesn’t treat flu, cancer, heart disease, tuberculosis, hepatitis C, etc., as national emergencies that disrupt everyday life, even as the work continues on preventing and treating them. The U.S.’s COVID strategy certainly seems to be going in that direction. Broad restrictions such as mask mandates are out of the question. Interventions targeted at those most vulnerable to severe disease exist, but they aren’t getting much fanfare. This fall’s COVID-booster campaign has been muted. Treatments such as bebtelovimab and Evusheld remain on shelves, underpublicized and underused.

    At the same time, hundreds of Americans are still dying of COVID every day and will likely continue to die of COVID every day. A cumulative annual toll of 100,000 deaths a year would still make COVID a top-10 cause of death, ahead of any other infectious disease. When the first 100,000 Americans died of COVID, in spring 2020, newspapers memorialized the grim milestone. The New York Times devoted its entire front page to chronicling the lives lost to COVID. It might have been hard to imagine, back in 2020, that the U.S. would come to accept 100,000 people dying of COVID every year. Whether or not that means the pandemic is over, the second part of the president’s statement is harder to argue with: COVID is and will remain a problem.

    Sarah Zhang

    Source link