Feeds

SGI loss deepens to $213 million

Ongoing restructure, failed sale of NT workstation line blamed

  • alert
  • submit to reddit

The essential guide to IT transformation

SGI blamed its Q1 2000 loss of $68 million, announced yesterday, on a "temporary loss of momentum", but it's hard not to see it as a sign the company is grinding to a halt. The loss was five times worse than Wall Street had been expecting, and to make matters worse, that's before anyone took into account SGI's restructuring charges, which dragged the loss down to a staggering $213 million. This time last year, it lost $44 million. Revenues for the quarter reached $425 million, down slightly from the $475 million it recorded for the same period last year. CEO Robert Bishop put a brave face on the news, claiming that the company's restructuring is continuing apace and that "solid progress" has been made in the past few months. Possibly, but the outlook isn't too good. The restructuring charges incurred in the quarter included $86 million which SGI had hoped to make selling off its Windows NT workstation product line, but clearly no one was willing to pay the asking price. That doesn't bode too well for SGI's plan to sell of its Cray supercomputer division, announced, like the NT workstation sale, back in August by then CEO Rick Belluzzo. Soon afterwards, Belluzzo bailed out to go and work of Bill Gates, and we now wonder how seriously he considered staying with SGI. The company announced last month that it had found a partner to join with it in taking a stake in a spun-off Cray operation. That said, it has yet to say who the partner is, which suggests that both parties have yet to finalise terms. Given that's what it was saying about the NT workstation line not so long ago, confidence that it can pull off the Cray sale can't be high. At least it appears to be still selling computers -- it's revenue wasn't down too much -- so some money is coming into the company, though it will need to work very hard to increase sales, if it wants to pull out of its loss spiral. You can see the logic of focusing on high-margin Net servers here, but going right up against Sun, IBM, HP, et al and making a go of it is going to take some doing. ®

Boost IT visibility and business value

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
Broadband slow and expensive? Blame Telstra says CloudFlare
Won't peer, will gouge for Internet transit
Netflix swallows yet another bitter pill, inks peering deal with TWC
Net neutrality crusader once again pays up for priority access
prev story

Whitepapers

Best practices for enterprise data
Discussing how technology providers have innovated in order to solve new challenges, creating a new framework for enterprise data.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?