Silicon Graphics Inc’s new management has been visiting Wall Street trying to pour oil on some difficult financial waters ahead. Merrill Lynch & Co Steve Milunovich’s impression is that SGI will turn in a loss of $0.23 a share even before SGI writes off the kitchen sink in fourth quarter charges. The consensus amongst analysts according to First Call is a loss of $0.24. SGI said it’s trying to cut receivables time by about a quarter from 74 days and implement new expense and revenue counting systems. Cash that SGI generates is being used to buy back stock. After spinning out MIPS and dumping Cosmo the brokerage figures that SGI’s successful Alias/Wavefront graphics shop may be next on the block. Completely untrue, says SGI. The company said it considered all options when putting its new business plan together under newly-appointed CEO Rick Belluzzo but concluded the graphics unit was core to its digital imaging business. It is also said to be considering exploiting its graphics technology in the volume market – something it has being saying for months – by the possible sale of chips of chipsets, software, and licenses. SGI’s upcoming Borg NT Visual PC, at $4,000 to $13,000 is only part of the answer. It told Merrill Lynch sales of the unit for the first six to nine months are likely to be in the installed base. With the Unix workstation market declining by 15%, Merrill notes, NT revenue could surpass Unix workstations in 18 months [and] the annual unit run rate could hit one million in six months from shipment. Margins should be in the mid-to-low 20% compared with 50% for servers. Meantime, SGI told ComputerWire its Unix-to-NT integration and connectivity strategy to tie the desktops to its Irix server and workstation lines still hasn’t gelled enough to make any details public. SGI told ComputerWire it will introduce a MIPS R14000 follow-on to the planned R12000 coming later this year to make up for Merced’s delay. á
