Silicon Graphics (SGI) is confident that it will return to long-term growth after posting second quarter losses in line with analysts' expectations.
For the period ending 31 December 1999, the server supplier saw fourth quarter revenue drop by five per cent to $648.2 million when compared with the same period last year. Losses amounted to $9.1 million or $0.05 per share on a fully diluted basis compared with a net loss of $20.3 million or $0.11 per diluted share in the same period last year.
The results included a $16 million gain relating to a reduction in estimated restructuring costs. Without this SGI would have posted a loss of $1 million or $0.01 per share, which is in line with the First Call analysts' consensus estimate.
SGI chairman and chief executive, Bob Bishop, who took over from Rick Belluzzo in August, said he is encouraged by the figures. Belluzzo resigned abruptly last year after unveiling a plan to cut SGI's workforce and leading the company to its first profitable quarter after seven straight losing quarters.
"I believe the numbers reflect the stabilisation we've achieved in our customer base and our field organisation in the last quarter, setting the stage for future growth," said Bishop. But he admitted that a return to growth "will take a little longer than expected".
SGI hopes that its domestic technical computing market will grow "significantly" over the next few years and it will stimulate demand by introducing a steady stream of products and services, including products for dealing with media streaming, high-volume Internet traffic and digital asset management.
"We will be on two tracks: Mips, which accounts for 95 per cent of today's revenue, and the architecture that accommodates Intel and Linux in the future. We will have the bridge for that when it happens," said Bishop.
Some 63 per cent of SGI's sales were generated in the US this quarter. Europe and the rest of the world accounted for 26 per cent and 21 per cent respectively.
SGI's shares fell 3/16 to close at 10 5/8 on Monday, but have fallen 37 per cent in the last twelve months.
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