SGI takes a hit
Loses CFO, downgraded to underperform
Analysts Salomon Smith Barney downgraded SGI an 'underperform' yesterday, taking the stock below a dollar.
Silicon Graphics said it would be reviewing its business plans, again, and predicted that revenues for the quarter ending June 30 would be between $430 and $440 million, resulting in a loss of between $70 and $80 million. SGI eliminated 1,000 jobs in the quarter, and says its cash pile is steady at $120 million. The company had appeared to be on its way to stemming its losses, but the warning this week that bookings were soft has prompted another, umpteenth business rethink in Mountain View.
Two other analysts reiterated 'market perform' ratings for the SGI stock.
President and CFO Hal Covert was stepping down for personal reasons, although he was was credited with implementing a new Enterprise Resource Planning system at SGI. ERP consultancy fees and related restructuring costs were listed in accounts for the previous quarter at $7.2 million.
Jeff Zellmer takes the CFO seat, and Warren Pratt assumes Covert's other duties, such as dealing with invoices from ERP consultants. ®