Slumping Sales Clip Silicon Graphics Profit
Silicon Graphics Inc. on Tuesday reported a fiscal third-quarter loss that was in line with diminished expectations, hurt by slumping sales of its powerful workstations and supercomputers.
The struggling Mountain View-based company said it lost $68 million, or 36 cents a share, before charges in the quarter ended March 31, compared with a profit of $10.5 million, or 6 cents a share, in the year-ago period. Last year’s quarter included $2.48 million in charges for its $740-million purchase of Cray Research Inc.
The earnings report shows how much work Silicon Graphics’ new chief executive, Rick Belluzzo, has to do to fix the ailing company, whose high-powered computers are best known for producing the realistic-looking dinosaurs in “Jurassic Park.” Silicon Graphics had warned last month that it would lose money.
Silicon Graphics said sales fell 22.1% to $708.3 million from $909.4 million in the year-ago period.
In his March warning about the quarterly loss, Belluzzo cited declines in the Unix workstation and supercomputer businesses as well as “marketing execution challenges in the server business.”
Before the warning, Silicon Graphics had been expected to break even in the quarter, according to analysts. Including a pretax charge of $114 million for restructuring and other unspecified charges, Silicon Graphics lost $153 million, or 81 cents a share, in this year’s third quarter.
Silicon Graphics reported its earnings after the close of U.S. markets. In regular New York trading, its shares rose 19 cents to close at $13.75.
At a Glance:
Other technology-related companies reporting earnings excluding one-time charges and gains, unless noted, included:
* Qualcomm Inc. said fiscal second-quarter earnings beat diminished expectations, though revenue fell from the previous quarter because of sluggish sales in South Korea.
The wireless phone equipment maker based in San Diego said profit before a tax gain was 25 cents a diluted share, compared with net income of $16.7 million, or 23 cents, in the year-earlier period. Qualcomm in February warned that canceled South Korean orders would hurt earnings, and analysts slashed estimates to 21 cents.
Revenue fell 3.2% to $761 million from $786 million in the fiscal first quarter, but it was up 30% from $586 million in the year-ago period. After a gain from a tax benefit, Qualcomm had net income of $26 million, or 36 cents a share.
* Pleasanton-based PeopleSoft Inc. said first-quarter net income jumped 90%, better than Wall Street had expected, on strong sales of its financial, manufacturing and human resources software. Separately, PeopleSoft said the U.S. Navy had agreed to use its human resources management software to run its payroll of 800,000 personnel.
PeopleSoft said it earned $33.8 million, or 13 cents a share on a diluted basis, compared with $17.8 million, or 7 cents, in the same quarter a year ago. Wall Street expected earnings of 12 cents a share.
Revenue for the quarter ended March 31 rose 81% to $277.7 million from $153.7 million last year.
* Storage Technology Corp. reported better-than-expected first-quarter earnings on strong sales of its storage products. After the market closed, StorageTek said its net income rose 2.5% to $40.6 million, or 74 cents a share on a diluted basis, from $39.6 million, or 63 cents, a year ago.
Wall Street had expected earnings of 73 cents. First-quarter revenue rose 11% to $484.9 million from $438.6 million a year ago.
The Palo Alto-based company also said it will get help from personal computer maker Compaq Computer Corp. in developing and selling its high-end computer storage devices.
* Borland International Inc. reported a first-quarter net loss of $13.4 million, including charges, or 27 cents per diluted share, compared with a net loss of $44.5 million, or 92 cents, a year ago.
Scotts Valley-based Borland reported quarterly revenue of $46.5 million, compared to $43.4 million in the year-ago period.
* Long Beach-based First Consulting Group, a provider of information technology to health-care companies, reported first-quarter net income of $1.74 million, or 12 cents a diluted share, compared with $394,000, or 4 cents, a year ago. Net revenue was $2.8 million, compared with $20.2 million a year ago.
* MORE EARNINGS: D3
