Financially-troubled Silicon Graphics Inc has warned of a shortfall in its third quarter, hanging the blame on product transitions. SGI said Wednesday that, based on a preliminary analysis of the quarter ended yesterday, it expects to report revenue in the low- to mid- $600m range. That top line will trickle down into a net loss that will be $0.20 to $0.25 larger than the $0.07 Wall Street was expecting, according to First Call. The Mountain View, California-based company has reported losses in each of its past six quarters. The news carries an extra bite, as a lower-than expected loss last quarter seemed to indicate that the company had begun to bring costs in line with its revenue streams.
SGI says the trouble stems from transitions in both of its principal product lines, highlighting the difficulties it has had in its ongoing shift towards the Intel-Windows NT arena. This quarter, delays in the initial production ramp of the 320 Visual Workstation and in implementing a new operations model have hurt that area of the business, SGI says. The company insists the product is now in full production, however. The Origin server business was similarly impacted by falling sales ahead of the imminent introduction of the new R12000 microprocessor-based systems, which SGI expects to be available without supply restraints in the June quarter. The company will announce its actual results for the quarter on April 22. Analysts are expecting a return to profitability next quarter, with earnings of $0.12 per share.
