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Cray loss deeper than expected

Revenue is hit over delays in improved memory for its SV1ex supercomputer. The company also has some fallout ahead from the Compaq-HP merger.

Hurt by a delayed memory upgrade, revenue at supercomputer maker Cray declined 13 percent to $29.4 million for its third quarter, resulting in a net loss deeper than analysts expected.

Cray had a loss of $10.8 million for the quarter ended Sept. 30, including a $1.3 million restructuring charge primarily from layoffs, the company said in a statement. The Seattle company, created when Tera Computer acquired the Cray division of SGI in March 2000, sells high-powered computers used for tasks such as designing cars or analyzing spy satellite photos.

Adjusted for one-time charges, the company had a net loss of $7.7 million, or 19 cents a share, deeper than the loss of 15 cents a share predicted by analysts surveyed by First Call.

The financial results were hurt by a delay in improved memory for the company's SV1ex supercomputer, Cray said in a statement.

The company also said it has canceled a project announced in January, the SuperCluster machines that used Compaq's Alpha chips and the Linux operating system on a host of interconnected small computers. Compaq is dropping the Alpha chip in favor of Intel's Itanium.

"We are in the process of refocusing our plans for the Alpha-based Cray SuperCluster product, following news of the planned merger between Compaq and Hewlett Packard," the company said, adding that the Cray instead will work on professional services.

Some more traditional supercomputers are in the pipeline. The Cray MTA-2 is due by the end of the year, the Cray SV2 is due by the end of 2002, and the SX-6, a machine actually built by NEC, is due by the end of 2001.

The Sept. 11 attack on the World Trade Center and Pentagon have spurred government spending that led to an unanticipated Cray supercomputer order, Cray said.