Saturday, May 7, 2011

SGI Beats Expectations with fast start to 2011

SGI (Silicon Graphics International) got of to its fastest start ever in Q1 of 2011. Revenues were $143.7 million , down 19% sequentially from $177.5 million, but up 33% from $107.8 million in the year-earlier quarter. Because SGI's computer systems are large ticket items, and many of its customers are government agencies, the slide from Q4 to Q1 is not unusual. The real trend to watch was the 33% uptick from Q1 2010.

The Altix UV supercomputer line introduced in 2010 continues to sell well. Recent initiatives are helping, notably UV systems running the Windows operating system and SQL Server. The storage side of the business did well. The two largest customers of SGI are and the U.S. government.

SGI is the result of the acquisition of the old SGI, Silicon Graphics, by Rackable Systems, which specialized in racked server systems designed for power savings. In the analyst conference call on May 3rd, management said exactly what I had been hoping for when the companies merged. The old Silicon Graphics made great computers, but never showed any concern for returns for shareholders, and finally went bankrupt in 2009.

The new SGI retained the tradition of making great computers for technical computing, but has been keeping costs down with an eye on making profits for stockholders. This is great!

For details see my summary, SGI Q1 2011 Analyst Conference. Note this was actualy fiscal Q3 for SGI.

See also Silicon Graphics International

Disclaimer: I own SGI stock.

Keep diversified!

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