The loss isn't as bad as SGI warned it might be on Oct. 9, when the company said component shortages would mean a net loss of 28 to 30 cents per share.
However, you might need one of SGI's new 512-CPU Origin 3800 servers to figure out whether the company beat Wall Street expectations.
Analysts surveyed by First Call/Thomson Financial said SGI was expected to report a loss of 46 cents a share for the quarter, which ended Sept. 30. However, that figure excluded a gain of 21 cents per share that resulted from sale of SGI assets.
Excluding the asset gain, the worst SGI could have done was a net loss of 47 cents per share, which would mean the company missed analyst expectations, said First Call spokesman Chuck Hill. However, tax effects could change that, reducing SGI's loss and beating expectations.
SGI chief financial officer Hal Covert said in an interview Monday that the company beat Wall Street expectations. Using analysts' methods, SGI's loss came to about 39 or 40 cents per share, he said.
Covert said that SGI expects to become profitable in the second half of its fiscal year 2001, which takes place during the first six months of calendar 2001.
The $426 million revenue is a decrease from the $514 million from the year-ago quarter, a figure adjusted for the sale of the company's Cray computer division. However, the net loss of 26 cents a share is a step up from the $1.24 per-share loss for the year-ago quarter.
The company was hurt by component shortages, including new custom chips and ceramic packaging used in chips, chief executive Bob Bishop said in a conference call. Covert said the shortages will continue in the current quarter, with projected revenue of $515 million.
The company had an order backlog of $367 million for the quarter, $70 million higher than the previous quarter and $120 million more than SGI would have liked, Covert said. The reason for the larger backlog was the component shortages, he said.
SGI is experiencing "strong market acceptance" of its new Origin 3000 series servers and its Octane 2 graphics workstations, Covert said. Roughly 80 percent of the new machines are going to existing SGI customers, company executives said.
However, SGI's Unix servers are emerging in a fiercely competitive Unix server market in which Hewlett-Packard and IBM are gunning to erode some of the dominance of Sun Microsystems. Compaq Computer and Unisys also are trying to win a place in some markets.
SGI predicted that revenue growth for the first two quarters of calendar year 2001 will be 20 percent compared with the year-ago quarters.
The company is staying as close as possible to its Hollywood roots, selling 200 workstations to computer animation studio Pixar and 500 to Disney, Bishop said. But a major new company focus is selling servers for sending streams of video across the Internet, he added.
America Online, Time Warner and CNN use SGI servers for streaming, he said. Wamnet also is using SGI servers for handling streams of digital information.
Meanwhile, the Federal Aviation Administration purchased 104 SGI Origin 200 servers, the company announced separately today. These computers will be used for handling Doppler radar weather information at 45 national airports.