Cray will realise 'substantial' loss. But Shasta minute, folks, big iron market will pick up

And... stock-botherers seem happy with that

Supercomputing remains a tough place to do business, with Cray warning investors that it expects to report a significant net loss for both 2018 and this financial year.

Today's announcement included the prediction that revenue in 2019 will grow “modestly” over a preliminary result of around $450m in 2018 (compared to a full-year 2017 revenue of $392.5m and loss of $133.8m).

Telling the world it would bag predicted revenue of just $70m in the coming quarter (Q1 2019) also didn't send the HPC specialist's stock price tumbling: at the time of writing the company's shares were trading up slightly to $22.31, compared to $21.93 at opening.

That $70m predicted for the coming quarter compares to $79m for Q1 2018, a quarter in which the company delivered a $25m net loss.

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Cray must be nostalgic for the heady days of 2015, when revenue was better than $724m. That was followed by a multi-year contraction in the supercomputer market, which CEO Peter Ungaro said in early 2018 had shrunk by 60 per cent, with sales sliding in the government and energy markets, and many customers extending the life of existing iron.

Ungaro said the supercomputer market should pick up in 2019, but Cray's financials will be constrained by the transition to its upcoming Shasta machine, its approach to the exascale market.

Ungaro said: “While our core market continues to show signs of a rebound, we expect to grow modestly in 2019 as we transition to our next generation Shasta supercomputer systems late this year and a significant number of large opportunities are slated for delivery in 2020 and beyond.”

The company said it "expects to recognise a substantial net loss for both 2018 and 2019."

Cray holds cash, investments, and restricted cash of $240m, so it can probably weather the storm for the time being. ®

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