Congrats BB...Silicon Graphics makes profit, forecast upbeat
(UPDATE: adds outlook, CEO interview, formerly MOUNTAIN VIEW, Calif.)
Tuesday January 22, 8:54 pm Eastern Time
SAN FRANCISCO, Jan 22 (Reuters) - Silicon Graphics Inc. (NYSE:SGI - news), announced on Tuesday it had turned to profit in its fiscal second quarter and forecast a minor operating loss at worst in the third quarter, as the restructured company meets strong demand for its design-oriented computers.
Results of SGI, which makes powerful server computers used to create special effects for films like ``Lord of the Rings'' and used by defense contractors, breezed past analysts' estimates of a loss, and shares of the company jumped 11.5 percent, or 30 cents, to $2.92 in after hours trade.
The company reported a profit of $37 million, or 19 cents per diluted share in the December-ending quarter, compared with a loss of $71 million, or 38 cents per share, in the year-earlier period.
Excluding one-time items and gains, SGI, of Mountain View, California, had a pro forma profit of $400,000, or nil per share, compared with a loss of $9 million, or 5 cents per share, a year ago.
The results easily topped expectations for the quarter of a loss of 12 cents to 15 cents per share, according to analysts polled by Thomson Financial/First Call.
Revenue was down to $364 million from $487 million a year ago.
Chief Executive Bob Bishop in a telephone interview said SGI would break even or post a small loss per share in the current, third quarter, compared with Wall Street estimates of a loss of 9 cents to 16 cents per share.
Revenue would be $330 million to $350 million and the gross profit margin would be 40 percent to 42 percent, he said.
SGI, which last year cut jobs and sold off part of its operations in an effort to downsize and focus, had found a niche of clients that were largely immune to the current economic downturn, Bishop said.
``There is something counter-cyclical about them,'' he said.
Silicon Graphics computers are design machines used for making Hollywood films, designing jet fighters and simulating car crashes for auto makers.
The company's shares have risen about six times from less than 50 cents since mid-October, following SGI's sale late that month of a 60 percent stake in its Japanese operation to NEC Corp. and announcement of a research deal with the U.S. Air Force.
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