Cray Research Inc has no predator on its back, but is equally downbeat in projecting its immediate outlook, saying that business in the current quarter will be significantly below last year’s second quarter net profits of 61 cents a share, and says it is very concerned about how the year’s shaping up. Chairman John Rollwagen told the annual meeting in Minneapolis on Tuesday that as more customers defer orders for supercomputers, the company once more is banking on a big fourth quarter to achieve earnings gains – he calls it a hockey stick phenomenon, but as Minneapolis is built on ice, he would – most others call it a J-curve. Meanwhile we’re really tightening down on our discretionary expenses, he said, adding that following the first quarter the situation hasn’t gotten better. The company is also worried that government procurements, which make up nearly 60% of Cray’s business, will be deferred – Cray estimates $700m in potential government business over the next four years for supercomputers, but expects funding delays to postpone orders by some agencies. As for Seymour Cray, departing with 5% of the assets in the form of Cray Computer Corp, he says he hopes the Cray 3 he is developing in Colorado Springs will be able to demonstrate that the computer will work by year-end; in 1990, we’ll deliver machines to customers. Under the joint marketing agreement with Control Data Corp, reported briefly yesterday (CI No 1,178), Cray will market its supercomputers to CDC customers and will explore possible product links between Control Data’s Cyber mainframes and Cray’s supercomputers. The objective is to offer a seamless network of computing power, including supercomputers, mainframes, information servers, network servers and workstations, the former rivals said.
