Silicon Graphics posts loss, cuts jobs

NEW YORK: Silicon Graphics Inc., SGI.N- a maker of computer servers and

workstations, on Friday reported a wider than expected loss in the fiscal

third-quarter, even as sales dropped 9.6 per cent amid a downturn in the

technology sector. The firm also said it would cut 15 per cent of its work force

and take a charge of up to $80 million.

For the quarter ended March 31, the Mountain View, Calif.-based firm reported

a net loss of $141 million, or 74 cents per diluted share, including a non-cash

write-off of $83 million for a venture investment. That compared with a net loss

of $18.1 million, or 10 cents per share, a year earlier.

The loss excluding items was $7 million, or 27 cents per share, larger than

the consensus analyst estimate of a loss of 25 cents per share as measured by

research firm Thomson Financial/First Call, within a range from 16 cents to 33

cents. The firm, whose products are used by graphic designers and engineers,

said revenue slid to $509.7 million from $563.7 million a year earlier.

In an effort to break even at the current revenue level by the next fiscal

year, the firm said it plans to eliminate about 1,000 regular, temporary and

contractor positions, or about 15 percent of its global work force, in the

fourth quarter, which ends in June.

The job cuts will result in a fourth-quarter restructuring charge of

approximately $60-$80 million. In the 2001 fiscal, fourth quarter net loss of

$141 million, or 74 cents per diluted share, included a non-cash write-off of

$83 million for a venture investment and other items.

Like virtually every other computer maker, Silicon Graphics has been caught

up in a major downturn among technology firms that has affected everyone from

microchip manufacturing equipment makers to retailers. Shares of SGI fell 86

cents, or 21.5 per cent, to $3.14 on the New York Stock Exchange on Friday

morning, nearly two-thirds off its 52-week high of $9.00.

(C) Reuters Limited 2001.