Systems vendor Silicon Graphics (SGI) capitalised on its takeover of Cray Research with a vastly improved Q4 result, proving analysts? wrong.
For the quarter to 30 June, SGI made $102.4 million on turnover of $1.2 billion compared to a loss of $48.7 million on turnover of $977.4 million in Q4 1996. Analysts predicted around $60 million profit and were amazed at the figures. SGI stock rose 40 per cent in half a day?s trading.
Ed McCracken, CEO at SGI, said: "Our product transition is complete, we are shipping our entire product line without significant constraints and, most importantly, the new products are finding acceptance with customers."
The Cray buy forced the vendor to post a charge of $120 million in Q4 1996 but just $6 million in Q4 1997. SGI bought Cray when it was losing market share to Sun Microsystems in the workstation business and wanted to diversify into bigger, more powerful machines. In May, SGI?s CFO resigned and the company reorganised which was proof that the buy was risky, analysts said. But the speed with which SGI has returned to profit and integrated Cray has impressed investors.
Its server business, 52 per cent of the total, grew 30 per cent over Q4 1996. The rest of the business, graphics workstations, shrunk as Microsoft Windows NT-based hardware ate into the market share of SGI?s Unix-based kit.
For the year, SGI made $78.5 million profit on turnover of $3.1 billion. In 1998 SGI plans to invest in servers for telecommunications and Web-based needs, McCracken said.
- ends -
Moon's dark side is mountainous, rugged and never visible from the Earth
The groundwater basins in some areas of Tehran have been damaged irreversibly
This is the first time that any spacecraft on Mars has recorded air vibrations on the planet
Arctic sea ice is thickening at a faster rate during winter, thus slowing down long-term decline: NASA
But, the seasonal ice growth could only delay the demise of the Arctic ice cap for a few more decades