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April 18, 1997updated 05 Sep 2016 12:09pm


By CBR Staff Writer

Silicon Graphics Inc is still looking for the kind of hit records that made it such a star in the early 1990s. Frankly, it’s tanking under the weight of having to juggle too many balls at the same time: its February 1996 Cray Research Inc purchase, an end-to-end product transition, the encroachment by rival Unix vendors on its prized imaging and graphics markets, plus aggressive competitive pricing and nibbling from Windows NT. Last week the company missed third quarter expectations by a mile, reporting net income of $10.5m, down 80% on the $50.0m it earned last time, on revenue up 15% at $909.3m on the $788m it did in the same period last year which include the results of its February 1996 purchase of Cray Research Inc. The figures include $8m of merger-related charges incurred in the quarter. Earnings per share were $0.06 where the Street had been looking for $0.27 according to First Call. At the nine month mark the company made a loss of $23.8m after unspecified merger-related costs, down from a profit of $163m, on revenue up 21% at $2.07bn compared with $1.71bn last time. SGI said a big contributing factor to the disappointing quarter was a delay getting its high-margin, high- performance Octane workstation line to market. It only did eight days of Octane revenue ships in the quarter, shifting 1,150 units. Also Cray started eating into its backlog which significantly impacted bookings.

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