SGI sees Q2 nearly breakeven

Silicon Graphics (NYSE: SGI) expects to report higher revenue and lower losses than Wall Street had expected in the second quarter.

After market close Tuesday, the maker of workstations and high-performance computers said it expects to report fiscal second quarter revenue of about $640 million, and operating results "just short" of breakeven. First Call's survey of 13 analysts had predicted a loss of 11 cents per share for the quarter ended Dec. 31.

Full second quarter results are scheduled for a Jan. 24 release.

"Our strong revenue forecast for the December quarter demonstrates the progress we are making in stabilizing our business environment," said Bob Bishop, chairman and CEO. "Our commitment to SGI's installed base and our continued focus on technical computing is beginning to produce results."

SGI in August started changing its strategy to focus on its core business of Unix workstations, as well as new opportunities related to the Internet and Linux. But the company lost ground when Rick Belluzzo left as CEO and chairman.

Also Monday, SGI said Betsy Rafael was promoted senior vice president and CFO, replacing Steve Gomo, who joined a privately-held firm that doesn't compete with SGI. Rafael had been SGI's corporate controller.

"Her strong financial and operational leadership during the past two years as corporate controller made her the obvious choice," Bishop said. "Having worked closely with Steve Gomo during this time, I expect the transition to go very smoothly."

Monday's revenue news marks the first positive financial announcement for SGI in several months. SGI fell far short of analyst forecasts in the fiscal first quarter, when the company lost $68 million, or 37 cents a share, excluding restructuring costs.

Shares of SGI closed Monday's regular trading at 10 1/2, up 15/16 for the session.>