With the contributions its machines are making in the entertainment and graphic arts fields, Silicon Graphics Inc is one of the most fashionable computer companies in the business at the moment, and it did not disappoint its fans, turning in a second quarter net profit up 48% at $54m on turnover that rose 41% to $524m, putting the company on target for close to $2,500m for the fiscal year. The figures were just ahead of analysts’ estimates at $34 a share for the quarter against a range of $0.29 to $0.33 with a mean of $0.32. At the time of the first quarter announcement, chief executive Edward McCracken raised the company’s revenue growth target to 40% from the 34% set in June and 30% three months earlier. According to McCracken, The underlying theme in our strong second quarter was balance. He noted that 50% of the company’s business came from international markets as both the European and Asian economies showed continuing recoveries, and the company also experienced strong demand across its entire product line; during the second quarter the company upgraded almost its lines with faster MIPS microprocessors while holding prices constant, stimulating demand from performance-hungry customers. The results left analysts redoing their sums and raising forecasts. The company maintains a long-term target of 11% to 13% growth in operating margins, but did much better in the December quarter, seeing a 15.6% rise to take gross margins to 52.4% of net sales, just off the first quarter’s 52.7%, but well above the year-ago 51.0% and the goal of 50% to 52% for the year.
