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SGI warns of revenue drop

The computer maker warns that revenue for its most recent quarter will be lower than previously expected, blaming corporations' reluctance to buy higher-end systems.

Stephen Shankland principal writer
Stephen Shankland has been a reporter at CNET since 1998 and writes about processors, digital photography, AI, quantum computing, computer science, materials science, supercomputers, drones, browsers, 3D printing, USB, and new computing technology in general. He has a soft spot in his heart for standards groups and I/O interfaces. His first big scoop was about radioactive cat poop.
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Stephen Shankland
SGI warned that revenue for its most recent quarter will be lower than previously expected, blaming corporations' continuing reluctance to buy higher-end computer systems.

SGI, based in Mountain View, Calif., said revenue for the quarter ended June 28 would be between $280 million and $290 million. In April, the company said revenue would range from $310 million to $330 million.

The loss will keep the company from climbing to profitability. SGI will have an operating loss of $20 million to $25 million, the company said.

However, the company said orders for new equipment exceeded billings for existing sales for the quarter, a trend that can indicate revenue will grow.

SGI rose to fame by selling high-end workstations and servers used for high-performance and graphics-intensive jobs such as creating digital imagery in movies like Jurassic Park. But the company struggled in the 1990s with an attempt to expand from its specialized niche to the general-purpose server market. At the same time, it attempted a shift from its version of the Unix operating system to Windows and, later, Linux, while expanding from its MIPS processors to Intel processors.

Now, though, under Chief Executive Bob Bishop, SGI has returned to its roots. It recently won deals to power Volvo's crash-simulation system and Philips' research into high-definition television. It plans to support its own operating system and processors indefinitely, though it also plans to support Intel's new Itanium 2 processor, announced Monday.