Silicon Graphics Sees Third-Quarter Loss on Charges, Missed Accounts

MOUNTAIN VIEW, Calif. (AP) -- Silicon Graphics Inc. shares tumbled in after-hours trading Thursday after the technology company said it will post a third-quarter loss, citing restructuring charges and the failure to close several high-profile deals.

The company expects to post an operating loss of $45 million on revenue of $160 million. Silicon Graphics -- which expects to report final results on April 19 -- projected in January it would report revenue in the range of $180 million to $200 million for the quarter.

Excluding about $15 million of restructuring charges, the operating loss is expected to be $30 million. Analysts surveyed by Thomson Financial currently expect Silicon Graphics to post a loss of 3 cents per share on revenue of $190.8 million.

"Although the newly launched Silicon Graphics PRISM visualization system is off to a good start, several large server and storage deals failed to close at the end of the quarter," said Chairman and CEO Bob Bishop in a statement. "Actions to strengthen sales and marketing while continuing to reduce expenses are our main focus."

Silicon Graphics also announced it sold a portion of its interest in SGI Japan to a group of Japanese investors for approximately $29 million in cash. On March 31, SGI sold approximately 16 percent of the outstanding stock of SGI Japan to Canon Sales Co., NIWS Co. and Softbank Media & Marketing Corp.

The company retains an interest of approximately 24 percent in SGI Japan, which is its exclusive distributor for the Japanese market. Because the sale was completed after the end of SGI's third fiscal quarter, proceeds will not be reflected in its balance sheet during the quarter.

Excluding the proceeds of the sale of equity in SGI Japan, SGI expects to report unrestricted cash, cash equivalents and marketable investments during the quarter of approximately $87 million.

Shares of Silicon graphics fell 13 cents, or 11.3 percent, to $1.02 in after-hours trading after closing unchanged at $1.15 on the New York Stock Exchange.