Cray Has 3rd-Qtr Profit of $2.1 Mln as Sales Rise 43%
By Ron Day
dg> SGI Can't doing anything right LOL!
Seattle, Oct. 23 (Bloomberg) -- Cray Inc., whose computers help the U.S. simulate nuclear explosions, had a $2.1 million third-quarter profit as sales more than doubled and spending on research and development declined.
Net income was 4 cents a share, compared with a net loss of $10.8 million or 26 cents, a year earlier, the Seattle-based company said in a statement. Revenue, which includes services and product sales, rose 43 percent to $42.1 million from $29.4 million.
Sales of products alone increased to $21.3 million from $9.12 million, as the company introduced more powerful supercomputers, Cray said. Revenue from services was little changed. Spending on research and development declined 45 percent to $7.3 million as more products were moved into production.
``We've proven that Cray is able to operate on a higher level than ever before,'' Chief Executive Officer James Rottsolk said on a conference call with analysts. ``As revenue grows, profitability will grow even faster.''
Cray was expected to earn 2 cents a share, the average estimate of three analysts surveyed by Thomson First Call.
Cray shares fell 5 cents to $4.52 at 12:29 p.m. New York time in Nasdaq Stock Market trading. They had more than doubled this year.
Cray maintained a prior forecast for revenue this year in the $150 million to $160 million range, a profitable second half of this year and a backlog of $100 million by year-end, said the statement.
Forecast Reaffirmed
The company reaffirmed a 2003 forecast for revenue of at least $200 million. The company said its expects a profit next year of about 5 percent to 10 percent of revenue.
The forecasts anticipate that the shipments of the new Cray X1 system will stay on schedule, that government appropriations for certain projects aren't delayed and that general economic conditions do not deteriorate, the company said.
Cray was formed in 2000 after Tera Computer Co. bought the Cray supercomputer unit of Silicon Graphics Inc. Cray last year focused on design and development and this year is moving into production, Rottsolk said.
Two supercomputers were sold to the University of Toronto for studies of the Earth's interior and atmosphere during the quarter, the company said.
Increasing Demand
Demand for super computing has increased significantly in the past 12 months because the U.S. government is concerned that Japan now has the world's fastest supercomputer, called the Earth Simulator, said Rottsolk.
``It presents a real challenge for the United States,'' he said.
If Congress allocates funds for a computer with greater capacity than the 40 trillion operations a second performed by Japan's, about 50 Cray supercomputers each worth $8 million to $10 million would be needed, he said.
``Hopefully we will be a major beneficiary'' if the supercomputer is funded by Congress, he said.
Cray in February announced an agreement with Dell Computer Corp., the world's largest personal computer maker, to develop software for low-end servers.
``Winning contracts in this arena has been more difficult than we anticipated early on,'' Rottsolk said. ``Most customers are price sensitive. We are still in the process of actively competing for business in this arena.'' |
