SGI Q1 loss beats Street
Component shortages still hit revenues, though
SGI managed to pull at least one rabbit out of its financial top hat yesterday, widely beating Wall Street expectations of its earnings (or lack of them) despite a predicted fall in revenue.
Financial analysts had been anticipating a loss of 45 cents a share, according to Zacks Investment Research's average, but SGI turned in a loss of $49 million, or 26 cents a share, for its first quarter of fiscal 2001, ended 30 September. For the same period last year, the company made a loss of $225 million, or 124 cents a share.
Analysts had expected a loss of 14 cents a share, but were forced to revise that figure after SGI issued a warning earlier this month, stating its loss would widen beyond expectations thanks to a share buy-back plan.
However, SGI's revenues fell year-on-year, falling from last year's $514 million to $426 million. Again, that was expected and announced during the earnings warning. SGI blames the dip on component shortages, which have also hit the likes of IBM. SGI claims it has a $367 million order backlog, some $120 million higher than it expected, thanks to the shortages.
If these supply problems are resolved, SGI expects its revenues to begin growing again, rising around 20 per cent throughout the first half of fiscal 2001 - the company's target is to achieve growth and profitability during the second half of fiscal 2001. ®