Silicon Graphics Inc only just missed its $3 billion target for fiscal 1996, recording a profit of $115m on revenue of $2.92 billion in the year ending this June, which includes numbers from its Cray Research Inc acquisition. Earnings per share for the year were $0.65 compared with the $1.28 it paid out in 1995 when it earned $228m on revenue of $2.22 billion. The $731m Cray acquisition skewed both SGI’s year-end and fourth quarter figures. For the June quarter, it reported a loss of $48.7m on revenue of $977m. Unconsolidated fourth quarter results would have shown a profit of $81m on revenue of $826m, and earnings of $0.46 would have beaten analysts’ estimates of $0.42. For what it’s worth, unconsolidated year-end numbers would have shown a $245m profit on revenue of $2.8 billion. SGI took a pre-tax charge of $102m in the fourth quarter for the Cray acquisition, including $98m written down to R&D. In the fourth quarter of fiscal 1995, it reported a profit of $52.7m on revenue of $653m. Included in this year’s fourth quarter numbers is an operating loss of $23m on $151m revenue that Cray recorded in its June quarter. The figures also include losses incurred by Cray’s Business Systems Division which was sold to Sun Microsystems Inc at the beginning of July. SGI paid $576m cash for 75% of Cray in April 1996 and acquired the remaining shares via a stock swap in June valued at $155m, brining the total paid to around $731m. SGI attributes Cray’s loss to the transition to its T90 and Alpha RISC-based T3E lines. SGI has recently shipped the first two T3E production units. It claims a $572m order book at the end of June; it picked up the $437m order book that Cray held back in March.
But loses president and COO to @Home
SGI’s otherwise healthy numbers were tainted by news that president and COO Tom Jermoluk has been lured away to @Home Corp where he’s been appointed chairman, CEO and president. @Home, the Mountain View, California-joint venture between Tele-Communications Inc and Kleiner Perkins Caufield & Byers is bringing high speed data to homes, workplaces and schools via cable connections to PCs. The start-up must be offering some serious money. Its roster of heavy hitters also includes former Sybase Inc CFO Ken Goldman as CFO; William Hearst III, former Kleiner Perkins director, and latterly @Home president and CEO moves over to the vice chairman’s role. SGI chairman and CEO Ed McCracken assumes both of Jermoluk’s roles; McCracken was SGI president from 1984 to 1994. No replacement is being sought.
