<FONT COLOR="#CC0000">See the "bold" marked below.</FONT>
MOUNTAIN VIEW, Calif., Jan 22 (Reuters) - Silicon Graphics Inc said it began a
previously announced restructuring plan that will start reducing operating
expenses beginning in the third quarter.
Earlier, SGI reported a second quarter net loss of $31 million, or $0.17 a share,
including $53 million in restructuring and acquisition related charges,
compared with a net loss of $13 million, or $0.07 per share, in the second
quarter of fiscal 1997.
On an operating basis, before the charges, SGI reported operating income of
$3.4 million, on revenues of $851 million.
Last October, SGI announced plans to layoff 850 of its employees -- 250 of
those layoffs were independent contractors and the rest were regular staffers.
At the time, SGI estimated that it would take a charge of about $50 million.
''Despite a set of challenging transitions, we were able to restore a degree of
momentum after a disappointing first quarter,'' said Edward R. McCracken,
chairman and chief executive officer, in a statement.
SGI said its server business grew 11 percent year over year, with the potential
for stronger growth. SGI also is focusing on key industries and applications to
drive growth.
SGI said cash, cash equivalents and marketable investments were $655 million
at December 31, 1997 and its backlog was $393 million.
According to First Call, analysts had been looking for operating earnings of
about $0.07 a share, before charges, according to consensus estimates.
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