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SGI warns of lower Q3 earnings (1999)

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San Francisco (April 1, 1999) -- Silicon Graphics Inc. (SGI) today announced that its financial results for the third quarter ended March 31, 1999, will be lower than expected, with revenues estimated to be in the low-to-mid $600 million range.

Based on that forecast, the company now expects to report a net loss of 20 cents to 25 cents greater than Wall Street expectations.

Before today's announcement, 14 analysts polled by First Call had predicted SGI would post a third-quarter loss of about 7 cents a share. Taking account of SGI's warning, the loss per share would total 27 cents to 32 cents per share.

SGI will report actual results for the quarter on April 22.

The company attributed the poor results to delays in the production of its new Visual Workstation 320, now in full production. SGI has also had difficulties with the transitioning of its Origin server business with its new R12000 microprocessor-based systems, which will be available in the June quarter, Rick Belluzzo, SGI chairman and chief executive officer, said in a statement.

SGI, with 9,300 employees worldwide, is a supplier of visual computing and high performance systems.

For the third quarter of 1998, SGI reported a loss of $153 million, or 81 cents per share, on revenue of $708 million.

The Nasdaq Stock Exchange reported SGI stock at $16.56 today, up 2.3.

Looking ahead, analysts had predicted a loss of 49 cents a share for the 1999 fiscal year, which will include a profit of 12 cents a share for the fourth quarter.