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SGI posts disappointing 4Q numbers, gets new CFO

SGI named former Red Hat executive Harold Covert as its new chief financial officer Monday. Covert appears to have his work cut out for him as SGI also reported disappointing sales and an operating loss of $59 million in its fourth quarter.

In the quarter, SGI (NYSE: SGI) posted an operating loss of $59 million on sales of $534 million.

First Call Corp. consensus predicted the computer workstation maker would lose 19 cents a share in the quarter.

Earlier this month, SGI warned that it would miss analysts' sales and earnings estimates.

Originally, First Call Corp. consensus pegged it for a loss of 8 cents a share.

Including a variety of one-time charges, SGI posted a net loss of $608 million, or $3.27 a share, in the quarter.

"As we stated in our announcement of July 11th, supply constraints on the desktop products, multiple product transitions and the imminent release of the third generation NUMA product family reduced fourth quarter revenue levels," said CEO Bob Bishop in a prepared release. "In addition, reserves related to our spare parts and inventory reduced our gross margin for the quarter."

The $534 million in sales represents a 36 percent decline from the year-ago quarter when it earned 35 million on sales of $828 million.

For the fiscal year, it lost $830 million, or $4.52 a share, on sales of $2.3 billion compared to a profit of $54 million, or 28 cents a share, on sales of $2.7 billion in fiscal 1999.

On the bright side, Covert joins a company that reported a 31 percent jump in bookings this quarter and a backlog of more than $100 million for its third generation NUMA products heading into the first quarter.

"We are in the midst of a major turnaround at this time, and Hal's profile fits precisely our need to focus on growth and shareholder value," Bishop said in a release.

SGI shares have fallen on hard times of late, slipping to a 52-week low of 3 1/16 earlier this month after peaking at 18 7/8 last July.

All 13 analysts following the stock rate it a "hold."

First Call Corp. consensus pegs SGI for a profit of 9 cents a share in fiscal 2001.