SGI profits fall short
Hit with a slow expansion of new products, Silicon Graphics expects to post second-quarter profits far below analysts' expectations.
SGI expects second-quarter earnings to fall within the "break-even" range, excluding charges relating to its acquisition of Cray Research in June. But Wall Street analysts were expecting the company to post a profit of 24 cents a share for the quarter ending December 31, according to First Call.
The company cited delays in manufacturing its new products, such as its entry-level O2 workstations and Origin family of servers, as contributing to its shipments falling below expectations. The announcement was made after the stock market closed today.
Meanwhile, SGI expects to report revenue of $825 million in the second quarter, down from a year ago when SGI and Cray Reseach would have reported combined revenues of $899 million for the quarter. The company will report its final results January 23.
SGI noted that product booking for the quarter, however, were the highest in the company's history--reaching $950 million. And product backlog grew to $750 million for the quarter, which was largely attributed to orders for the new products.
Customers waiting for SGI's new product line was part of the reason cited for the company posting a net loss of $22 million during the first quarter. SGI said customers in the first quarter delayed placing orders as they waited for the souped-up workstations and supercomputers.