Smart Modular Issues FY Q4 Warning; Cites Weak DRAM Prices

Smart Modular Technologies (SMOD), which makes memory modules, Monday afternoon said revenues for its fiscal fourth quarter ended August are going to come in way short of the Street consensus.

The company sees revenue of $160 million to $165 million; the Street has been at $206.7 million. Smart sees EPS of 21-23 cents a share, including a tax-related gain of 3-5 cents; that implies EPS ex the gains of 16-20 cents, versus the Street at 24 cents.

The company said that “the continued difficult DRAM pricing environment compounded by a leveling in unit demand” impacted the results. Smart Modular said DRAM prices flattened in the quarter, but at a level 65% below where they were two quarters ago.

That statement about leveling in unit demand is a little troubling; makes you wonder if it is company specific or not. Let’s hope it is.

Smart Modular said it will issue final results on October 3.

In after hours trading, the stock is down 35 cents, or 4%, at $8.67.

SMOD 1-yr chart: