From WSJ : "Silicon Graphics Up After Blowing Past 4Q Views"
NEW YORK (Dow Jones)--Silicon Graphics Inc. shares gained as much as
16% after the company's earnings blew past Wall Street expectations.
"They had substantially better-than-expected growth," said Jay
Vleeschhouwer, a Josephthal Lyon & Ross Inc. analyst.
The Mountain View. Calif., company was the New York Stock Exchange's
most heavily-traded stock after it reported net income of 56 cents a share for
the fourth quarter ended June 30, compared with a loss of 30 cents a share in
the year-ago period. A First Call Inc. estimate had Silicon Graphics earning 34
cents a share.
The company reported revenue of $1.2 billion, up 19% from $977 million a
year earlier. Vleeschhouwer said he had expected gross margins to improve,
but the revenue growth was a surprise.
"It's the return of the prodigal son," said David Wu of ABN/Amro Chicago
Corp.
Wu said the the company, the world's largest high-performance computer
maker, has "fundamentally changed its business model." Silicon Graphics, he
noted, previously posted disappointing earnings for seven straight quarters.
Wu and Vleeschhouwer were two of at least eight analysts to increase ratings
on the company to buy from hold. Andrew Neff of Bear Stearns & Co. raised
his rating on the stock to attractive from neutral. Others firms said to have
increased ratings on Silicon Graphics were Goldman Sachs & Co. and
Hambrecht & Quist Inc., but those changes couldn't be immediately
confirmed.
The company's stock rose 4 1/2, or 24%, to 23 1/4 Thursday in anticipation
of its earnings announcement after market close that day.
The shares were recently up 2 3/8, or 10.8%, at 25 3/4 in early trading Friday
on heavy volume of 3.8 million shares, compared with average daily volume of
1.3 million shares.
The stock had increased by as much as 16% when the market first opened.
- Christopher Grimes |
