Cray Research Inc’s second quarter figures – profits slumping 77% on sales down 4.5% (see page five) – were considerably worse than the company had expected: in May it said it expected turnover to grow 10% this year despite a weak performance in the first quarter; it attributed its changed outlook to competitive and economic conditions as well as delays in getting contracts signed for systems that are to be installed this year, and as a result, earnings will continue to be under pressure and it will be a challenge to match the $3.53 a share it did in the second half of last year; problems cited include a reduction in gross margins due to higher trade-in allowances and scrapping rather than reselling of older systems returned off lease or taken as trade-ins, plus costs associated with the Cray-3 project, due to be spun off.
