SGI posts fourth loss for year

Silicon Graphics (SGI) ended fiscal year 1998 with its fourth consecutive quarterly loss, but predicted it will do better next year thanks in part to the forthcoming release of its first Windows NT-based workstation. Including restructuring charges, SGI posted a net loss for the quarter, ended June 30, of $US220 million, or $1.17 per share, compared to earnings of $102 million, or 54 cents a share, a year ago. The results include about $205 million in charges related to a realignment of the company announced in April, which included the decision to develop Windows NT-based systems as well as scale back SGI's substantial investments in supercomputing.

Silicon Graphics (SGI) ended fiscal year 1998 with its fourth consecutive quarterly loss, but predicted it will do better next year thanks in part to the forthcoming release of its first Windows NT-based workstation.

Including restructuring charges, SGI posted a net loss for the quarter, ended June 30, of $US220 million, or $1.17 per share, compared to earnings of $102 million, or 54 cents a share, a year ago. Excluding the charges, SGI's net loss for the quarter was $57 million, or 31 cents per share, greater than the 25 cents per share estimated by 14 brokers polled by First Call.

The fourth-quarter results include approximately $205 million in charges related to a realignment of the company announced in April, which included the decision to develop Windows NT-based systems as well as scale back SGI's substantial investments in supercomputing.

Meanwhile, revenues for the quarter were $774 million, compared to $1.2 billion in the previous quarter.

For fiscal 1998, SGI reported a net loss of $468 million, or $2.47 cents per share, compared to 1997 net income of $79 million, or 43 cents per share, SGI said.

SGI's shares closed today at $11.50, down $2.63 from yesterday's closing price of $14.13.

SGI also said in April that it would spin off its Mips RISC chip unit as a separate business, called MIPS Technology Inc., in an initial public offering for about 17 percent of the outstanding shares of MIPS. MIPS yesterday reported fourth-quarter earnings of $4.6 million, or 13 cents a share, on revenue of $11 million, for the period ended June 30. In the same period last year, MIPS posted a loss of $9.5 million, or 26 cents a share, on revenue of $13.5 million.

SGI's results include the MIPS results.

SGI said its results this quarter reflect the "long term negative trends" that have affected its Unix workstation and supercomputer business. The company's workstation business has been losing ground to increasingly powerful, low-cost machines running Windows NT.

The company expects to post stronger results next year, buoyed by increased server sales and the introduction of its first Windows NT workstations later this year, Richard Belluzzo, SGI's chairman and chief executive officer, said in a statement.

Also on the plus side, Belluzzo said, enhanced marketing programs helped SGI's server sales increase 23 percent over the prior quarter.

In the third quarter, SGI reported a loss of $153 million, or 81 cents per share, on revenue of $708 million. The company's losses totaled $31 million in the second quarter, and $56 million in the first quarter.

SGI is based in Mountain View, California ,and can be reached on the World Wide Web on http://www.sgi.com/.

Join the newsletter!

Error: Please check your email address.
Show Comments
[]