INTERVIEW - Silicon Graphics Inc sees Q4 growth
LOS ANGELES, May 5 (Reuter) - Silicon Graphics Inc chief executive officer Edward McCracken expects nice
growth in earnings and revenues for this year's fourth quarter over last year's fourth quarter.
The consensus forecast is for Silicon Graphics to post earnings of $0.36 per share, after merger charges, against
$0.46 a share last year. McCracken sees growth in earnings before charges for its Cray Research Inc acquisition.
Last month, Silicon Graphics' third quarter earnings fell below forecasts adding to a series of consecutive
shortfalls.
"I would expect quarterly growth to be much better than it has been in the last few quarters," McCracken said.
"We've had some issues with product transition. About 80 percent of what we're shipping is new. I think we're
coming out of the other end of (the transition period)."
Earlier, it announced a reorganization to combine product lines and manufacturing into one organization led by
Robert Ewald, former head of Silicon Graphics Cray Research unit.
Silicon Graphics has been struggling to regain its financial footing this year as it absorbs Cray and launches a
sweeping upgrade of its entire product line.
McCracken said the reorganization was aimed at improving the process of getting new products out the door.
He also said the reorganization effectively completes the merger with Cray, which it acquired nine months ago.
Silicon Graphics is a maker of high-end and graphics intensive workstations running on the UNIX network
operating system.
It has faced increasing pressure from cheaper computing systems, including high-end PCs running on Microsoft
Corp Windows NT operating system, analyst said.
"Our systems support UNIX and its the best operating system for people who care about performance," said
McCracken when asked if Silicon Graphics planned to develop a system to run on Windows NT software.
"We're not religious about it (UNIX). We think if NT could provide performance that customers need, we'll
probably integrate it into our product lines. We continue to look at it."
McCracken said its new low-end 02 product line has been successful in its first few months.
"I believe we're gaining market share in that space, even on NT systems," he said.
-- Sue Zeidler (213) 380-2014 |
