The sun is certainly not shining on Silicon Graphics Incs little patch of valley and after the markets closed yesterday the company issued its second profit warning in a row, saying it expects only to break even on second quarter revenue of $825m, which is down 8.2% from the $899m it did in the same period last year. And thats before continuing charges for its June 1996 acquisition of Cray Research Inc are included. The news caught Wall Street on the hop; analysts polled by First Call on January 3 were still looking for an average of $0.24 per share in the quarter. At least SGI was able to blame at least part of the reason for its bleak first quarter – in which it lost $21.6m on revenue of $765.5m – on defective chips. As well as still digesting its Cray acquisition the company is currently in the midst of a top-to-bottom product transition and says delays in manufacturing its new workstations and servers as well as a change in the product mix was the cause of the shortfall in system shipments. SGI says product bookings in the quarter were $950m and that its product backlog has grown to $750m. SGI reports on January 23. As we went to press SGI stock had fallen $1.62 to $25.25 in after hours trading.
