Silicon Graphics published its first quarter results on Monday, showing a net loss of $37 million before special charges on revenue of $768 million.
An expected statement on the reorganisation of Silicon Graphics was postponed to Thursday, leading to speculation that the measures announced might be even further reaching than previously believed.
Silicon Graphics was widely expected to announce on Monday measures to curb costs, rumoured to include layoffs of up to 500 workers. The announcement has now been postponed to Thursday. Bill Kelly, Senior Vice President and acting CFO, said in a conference call with analysts that Silicon Graphics had a scheduled board meeting set for Tuesday and Wednesday, and that the operating plans would be discussed with the board.
This is being interpreted by some analysts as an indication that the SGI board is pressing for even more drastic measures, beyond what management was proposing, and is taken as a sign that chairman and CEO Ed McCracken might be forced to resign.
The first quarter results were in line with a statement issued on October 6. They show minimal revenue growth, from $766 million compared to the same quarter last year. After charges related to the acquisition of Paragraph International and other merger-related expenses, the loss for the quarter was $56 million.
This compares with a net loss of $22 million in the first quarter of the previous fiscal year. The company does note, however, that its cash position improved considerably during the quarter.
"Our disappointing first quarter results are due largely to a shortfall in our server business, particularly in the United States", said Edward R. McCracken, chairman and chief executive officer, in a statement. "We are taking steps to strengthen our sales and marketing efforts in support of our server product family".
SGI?s shares closed down 2.125 dollars per share to 15.25 dollars on Monday, mainly reflecting the general downward turn of technology stocks, but appeared to recover somewhat during trading on Tuesday.
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