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Technology Stocks : Silicon Graphics, Inc. (SGI)

SGI 89.27

+1.6%

Nov 25 3:59 PM EST

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To: Brett Behm who wrote (5052)	7/22/1998 6:18:00 PM
From: John M. Zulauf	Read Replies (1) of 14451

> Then again, I think SGI has only > surprised us 1 time in the last 2 years on the positive side. I think SGI will be close to the concensus number regardless of the performance this quarter. Here's my thinking on this -- if SGI had a killer quarter, they should take every charge they need to (or might in the next quarter or two). Since they (correctly) set expectations low, they can use that to their advantage to clean up the books regarding product-end-of-life, inventory value, Cosmo disolution, whatever. If they didn't have a good quarter, then these charges will be delayed until the NT product is out there (with a comensurate lowering of analysts expectations for the quarter or quarters until the NT revenue shows up). The only thing that could screw up my expectations is if they really tanked this last quarter, which I doubt since it's usually the strong for them. Now FYQ1 has been traditionally dubious and the price cutting moves for the current product line are a smart thing in Q1. What would you rather, higher current earning with greater earnings fluxuations (like last year) or steady earnings growth (even from a loss position). Me I like the latter, and I think SGI mgmnt will think the analyst will like the latter better as well. Just my stinking humble opinion, total divorce from any non-public information. john

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