Supermicro Craters On Shocking Margin Collapse Despite Euphoric Revenue Guidance, 10-1 Split

 More bad news for the slowly bursting AI bubble.

Shares of server-maker Super Micro Computer, which have been among the biggest beneficiaries of the AI euphoria over the past two years as it emerged as a proxy for AI demand (and server installs), soared as much as 16% before crashing more than 10%, after the company reported Q2 revenue and profit that missed estimates, but it was the company's plunging profit margins that which outweighed the company's ecstatic sales outlook that was billions above Wall Street projections as well as the 10-1 reverse stock split announcement.

For Q2, SMCI reported revenues of $5.31 billion, which missed the average estimate of $5.32 billion; while Adjusted EPS dropped to $6.25, well short of Super Micro’s own previous forecast and the $8.25 average analyst estimate.

But what truly spooked Wall Street was the incineration in margin which collapsed 580bps YoY (and 430bps QoQ) to just 11.3%, amid a fierce price cutting war with competitors such as Dell and Hewlett Packard.

Also, the $635 million in cash burn - the 3rd straight quarter of negative cash from operations - did not help.

While the company tried to blame the collapse in margins on "customer and product mix and investments in Talent and Research & Development, Wall Street did not buy it, and in fact it sold it aggressively, sending the stock collapsing to the lowest level of the year.

Not even the company's blowout outlook, which has 2025 full-year revenue between $26 and $30BN on Wall Street estimates of $23.6BN, nor the company's announcement of a 10-for-1 stock split after Oct 1, did anything to inspire buying, but judging by the afterhours action, certainly inspired selling as investors are suddenly worried about the longer-term profitability of AI-optimized servers sold by companies like Super Micro, Dell Technologies, and Hewlett Packard Enterprise if the company's margins are already cratering this fast.

A jump in demand for the equipment that powers artificial intelligence training and applications has helped drive sales at San Jose, California-based Super Micro, which makes data center servers. “We are well-positioned to become the largest IT infrastructure company,” CEO Charles Liang said in the statement. Alas, judging by the epic plunge in SMCI stock after hours, nobody believed him.

While the shares had more than doubled in value this year and been added to the S&P 500 and Nasdaq 100 indexes following increased demand for servers. Still, the stock has declined about 48% from a peak in March.

https://www.zerohedge.com/markets/supermicro-craters-shocking-margin-collapse-despite-euphoric-revenue-guidance-10-1-stock

Supernus ups guidance

 

• Net sales of Qelbree® increased 92% in the second quarter of 2024, compared to the same period in 2023.
  
  
  • $59.4 million and $104.5 million of net sales in the second quarter and first six months of 2024, respectively.
• Net sales of GOCOVRI® increased 10% in the second quarter of 2024, compared to the same period in 2023.
  
  
  • $31.7 million and $58.3 million of net sales in the second quarter and first six months of 2024, respectively.

• Total revenues were $168.3 million in the second quarter of 2024, an increase of 24% compared to the same period in 2023.
  
  
  • Total revenues excluding Trokendi XR® and Oxtellar XR® net product sales (non-GAAP)(1) increased 32% in the second quarter of 2024, compared to the same period in 2023.
    
• Operating income of $22.6 million and $19.4 million in the second quarter and first six months of 2024.
• Adjusted operating earnings (non-GAAP)(1) was $45.5 million and $67.7 million in the second quarter and first six months of 2024, respectively, compared to $10.0 million and $40.5 million in the same periods in 2023.
• Raising full year 2024 guidance for total revenues and operating earnings (GAAP and Non-GAAP).

Conference Call Details

Supernus will host a conference call and webcast today, August 6, 2024, at 4:30 p.m. Eastern Time to discuss these results. A live webcast will be available in the Events & Presentations section of the Company’s Investor Relations website www.supernus.com/Investors.

Participants may also pre-register any time before the call here. Once registration is completed, participants will be provided a dial-in number with a personalized conference code to access the call. Please dial in 15 minutes prior to the start time.

Following the live call, a replay will be available on the Company's Investor Relations website www.supernus.com/Investors. The webcast will be available on the Company’s website for 60 days following the live call.

https://www.globenewswire.com/news-release/2024/08/06/2925489/19871/en/Supernus-Announces-Second-Quarter-2024-Financial-Results.html

Veracyte ups guidance

 The company is raising full-year 2024 total revenue guidance to $432 million to $438 million, representing year-over-year growth of 20% to 21% and testing revenue growth of approximately 25%. This guidance range represents an increase compared to prior guidance of $402 million to $410 million. In addition, the company now expects cash, cash equivalents and short-term investments at the end of the year to be $260 million to $270 million compared to prior guidance of $236 million to $240 million.

Conference Call and Webcast Details

Veracyte will host a conference call and webcast today at 4:30 p.m. Eastern Time to discuss the company's financial results and provide a general business update. The conference call will be webcast live from the company’s website and will be available via the following link: https://edge.media-server.com/mmc/p/p5tuszv4. The webcast should be accessed 10 minutes prior to the conference call start time. A replay of the webcast will be available for one year following the conclusion of the live broadcast and will be accessible on the company’s website at https://investor.veracyte.com/events-presentations.

https://www.businesswire.com/news/home/20240806651491/en/

Amgen Redoubling Efforts To Take On Weight-Loss Kingpins Novo, Lilly

 Amgen (AMGN) is doubling down on its efforts to take on weight-loss kingpins Eli Lilly (LLY) and Novo Nordisk (NVO). But Amgen stock slipped late Tuesday on its mixed second-quarter report.

The biotech company is now planning to run a study of its highly anticipated obesity treatment, MariTide, later this year in patients with type 2 diabetes. The study will focus on patients with and without obesity.

Though the second-quarter report was "fairly uneventful," Mizuho Securities analyst Salim Syed said, "call commentary on obesity will trump all." MariTide uses a different mechanism from its already approved rivals to help patients lose weight.

Syed has a neutral rating on Amgen stock, which skidded 2.4% to 321.03 in late trades Tuesday. Shares were lingering in a buy zone after breaking out of a cup-with-handle base with a buy point at 322.60, according to MarketSurge.

Amgen Stock: Sales Skyrocket

Sales rocketed 20% to $8.39 billion, coming in above expectations for $8.35 billion, according to FactSet. But adjusted earnings missed forecasts at $4.97 a share. Analysts' expectations ranged from $4.98 to $5.07, RBC Capital Markets analyst Gregory Renza said in a client note.

Renza noted second-quarter outperformers included Amgen's biggest moneymaker, Prolia. Sales of the osteoporosis treatment jumped 13% to $1.17 billion, beating expectations for $1.09 billion to $1.11 billion, Renza said.

Notably, sales of products Amgen acquired alongside Horizon Pharma were mixed. Revenue from Tepezza, its thyroid eye disease treatment, missed forecasts at $479 million. But sales of gout treatment Krystexxa beat projections at $294 million.

Amgen raised the low end of its sales outlook and now expects $32.8 billion to $33.8 billion. At the midpoint, that topped analysts' call for $33.07 billion. The company also narrowed its profit guidance by 10 cents on either side to $19.10 to $20.10 a share. Amgen stock analysts projected $19.50.

https://www.investors.com/news/technology/amgen-stock-amgen-earnings-q2-2024/

Elevation Oncology Craters on Initial Small Phase 1 Results

 Elevation Oncology Inc. ELEV is trading lower on Tuesday after the company reported initial data from the dose escalation portion of the ongoing Phase 1 trial of EO-3021 in patients with advanced, unresectable, or metastatic solid tumors likely to express Claudin 18.2, including gastric, gastroesophageal junction, pancreatic, or esophageal cancers.

As of the data cutoff date of June 10, 32 patients had been treated. EO-3021 was observed to be generally well-tolerated. No Grade 4 or 5 treatment-related adverse events were reported, and less than 10% of patients discontinued EO-3021 due to adverse events.

Fifteen patients with gastric or GEJ cancers were evaluable for efficacy.

Seven of these 15 patients (47%) had tumors with Claudin 18.2 expression in ≥20% of tumor cells at IHC 2+/3+.

• In seven patients with Claudin 18.2 in ≥20% of tumor cells at IHC 2+/3+, the objective response rate (ORR) was 42.8% (three confirmed partial responses, one of which was confirmed following data cutoff).
• The disease control rate (DCR) was 71.4%, including two patients with stable disease (SD).
• In eight patients with Claudin 18.2 in <20% of tumor cells at IHC 2+/3+, the ORR was 0%, and the DCR was 50%, including four patients with SD. Investors are probably reacting to this.

Elevation Oncology plans to initiate enrollment in the dose expansion portion of the ongoing Phase 1 trial, further exploring two doses of EO-3021: 2.0 mg/kg IV Q3W and 2.5 mg/kg IV Q3W. These doses were selected to characterize EO-3021 to select an optimized dose for further clinical development.

Elevation Oncology is working to identify the appropriate biomarker threshold and plans to introduce a biomarker cutoff as part of the dose expansion portion of this Phase 1 trial. Elevation Oncology expects to share additional data from the Phase 1 trial, including from the dose expansion cohort, in the first half of 2025.

Elevation Oncology expects its $110.8 million cash, cash equivalents, and marketable securities as of June 30, 2024, to be sufficient to fund its current operations into 2026.

https://www.benzinga.com/general/biotech/24/08/40196487/why-is-penny-stock-elevation-oncology-trading-lower-on-tuesday

'Walz previews Trump border wall attack: ‘I’ll invest in the 30-foot-ladder factory’'

 Minnesota Gov. Tim Walz bashed former President Donald Trump’s US-Mexico border policy in a viral clip last week — joking that Trump’s signature frontier wall was an opportunity to “invest in the 30-foot-ladder factory.”

Walz, announced Tuesday as Vice President Kamala Harris’ running mate in the Nov. 5 election, has gained a reputation for trying to use ridicule to flip the script on the GOP ticket of Trump and Ohio Sen. JD Vance — including by dismissing mockery of Harris as “weird,” inspiring other Democrats to use the line.

“[Trump] talks about this wall. I always say, ‘Let me know how high it is. If it’s 25 feet, then I’ll invest in the 30-foot-ladder factory,'” Walz, 60, told CNN’s Anderson Cooper on July 30.

“That’s not how you stop this. You stop this using electronics, you stop it using more Border Patrol agents, and you stop it by having a legal system that allows for that tradition of allowing folks to come here just like my relatives did, to come here, be able to work and establish the American dream,” Walz said.

“He’s not interested in that. He wants to demonize,” Walz claimed — previewing his likely campaign-trail talking points.

“Look, we produce most of the turkeys that you’re going to eat on Thanksgiving [in Minnesota]. Those are immigrants working hard, establishing themselves here. What is [Trump] going to do? Is he going to take them all out?”

The quips did little to help Harris’ push to erase her history as the Biden administration’s failed “border czar” as the current VP attempts to position herself as the best person to handle the crisis at the southern border.

The border is a major liability for Harris, who became the presumptive Democratic nominee after President Biden, 81, ended his campaign for a second term on July 21 over concerns about his mental acuity.

Biden tapped Harris in early 2021 to lead US efforts to reduce illegal immigration by addressing its root causes, but her tenure in that role coincided with further increases.

Walz blasted Trump for leaning on congressional Republicans earlier this year to block a bipartisan border deal that aimed to hasten asylum processing while also giving the president the authority to shut down the border when asylum seekers hit a certain threshold.

Republican opponents of that plan said Biden already had the power to make such a declaration — which he proceeded to do in June. Preliminary data suggest that that action has caused a reduction in illegal crossings after three years of sequential record highs.

Polls show that the border ranks high among voter priorities, alongside other topics such as the economy.

Trump, 78, is vowing to mass-deport illegal immigrants if he reclaims the White House and has referred to his election rival as “Border Czar Harris” in recent public remarks.

https://nypost.com/2024/08/06/us-news/tim-walz-previews-trump-border-wall-attack-ill-invest-in-the-30-foot-ladder-factory/

Walz transformed Minnesota into a ‘trans refuge’ state

 Kamala Haris’ progressive running mate, Gov. Tim Walz, helped to transform Minnesota into a “trans refuge” state — signing legislation to protect gender-affirming care and to provide tampons in boys’ bathrooms at schools.

Walz, 60, a former high school teacher, signed the so-called “Trans Refuge” bill into law in April 2023, prohibiting the enforcement of out-of-state subpoenas, arrest warrants and extradition requests for people who travel to the North Star State from other states for gender-affirming care.

A month earlier, the Democrat signed an executive order protecting gender-affirming care in Minnesota, including puberty blockers, surgeries and hormone therapy. 

Tim Walz’s record is coming under heightened scrutiny now that he has been selected as a VP contender.Getty Images

The action also called upon state agencies not to approve health insurance plans that didn’t cover gender-affirming operations. 

“As states across the country move to ban access to gender-affirming care, we want LGBTQ Minnesotans to know they will continue to be safe, protected, and welcome in Minnesota,” Walz said in a statement at the time. 

“In Minnesota, you will not be punished for seeking or providing medical care,” he added.

The move came after a slew of red states had imposed a series of restrictions on those interventions.

“In this state, hate has no home,” Walz said during a signing ceremony. “In this state, love and acceptance is what we preach.” 

The governor signed that order next to a 12-year-old trans girl, Hildie Edwards.

Last year, Walz also signed an education finance bill that featured language stipulating that all public and charter schools in the state “must provide students with access to menstrual products at no charge” for grades 4 to 12 and that they “must be available to all menstruating students.”

Those products included “pads, tampons, or other similar products used in connection with the menstrual cycle,” the bill stated.

The bill’s sponsor, state Rep. Sandra Feist, a Democrat, claimed that data suggested as much as “10% of menstruating youth miss school days because of a lack of access to menstrual products.”

During the writing of the bill, state lawmakers rejected an amendment to include the word “female” in that language.

The measure was ultimately part of a broader education finance bill that ramped up spending for education by 10.2% over two years, amounting to a total of about $23.2 billion.

That same year, Walz backed the North Star Promise Program, to guarantee free college to families in the state who earned under $80,000 a year.

Kamala Harris announced Minnesota Gov. Tim Walz will be her running mate Tuesday.AP

Allies of former President Donald Trump quickly pummeled Walz over his progressive record, seeking to turn the tables on him after he described the GOP ticket as “weird.”

“What could be weirder than signing a bill requiring schools to stock tampons in boys’ bathrooms?” the Trump-aligned Make America Great Again PAC wrote on X alongside the ad.

Harris, 59 announced that she was tapping Walz to serve as her running mate Tuesday following a rushed process to determine her No. 2.

The selection drew praise from a variety of LGBTQ advocacy groups. 

The vice president also reportedly considered Pennsylvania Gov. Josh Shapiro, Kentucky Gov. Andy Beshear and Sen. Mark Kelly (D-Ariz.), among others.

“I am proud to announce that I’ve asked Governor Tim Walz to be my running mate. One of the things that stood out to me about Tim is how his convictions on fighting for middle-class families run deep,” Harris said in a statement Tuesday.

“It’s personal. As a governor, a coach, a teacher, and a veteran, he’s delivered for working families like his own. We are going to build a great partnership. We start out as underdogs but I believe together, we can win this election,” she added.

Harris and Walz are set to stump together in Philadelphia later in the day on Tuesday.

https://nypost.com/2024/08/06/us-news/kamala-harris-vp-pick-tim-walz-transformed-minnesota-into-a-trans-refuge-state/