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Cray reports Q3, posts profit [UPDATED]

Supercomputing bellweather Cray reported quarterly results yesterday. Highlights

Cray logo…Cray Inc. (NASDAQ: CRAY) today announced financial results for the third quarter ended September 30, 2008. Revenue for the quarter was $54.6 million compared to $55.0 million in the prior year period. The company reported net income for the quarter of $5.0 million or $0.15 per share compared to net income of $5.1 million or $0.16 per share in the third quarter of 2007.

Gross, product, and service margin all up. Expenses are also up 4.5M compared with the same quarter a year ago, but $3.3M of that is in R&D, which I think is a fine place to be increasing expenditure.

Note that this is historically a good quarter for Cray; it is the only profitable quarter thus far this year, and the only one last year.

[UPDATE] To Patrick’s comment, I found this article in The Seattle Times

If the Oak Ridge National Laboratory accepts a Cray supercomputer capable of performing 1,000 trillion calculations per second before the end of the year, the company expects full-year revenue of around $265 million and to be profitable from operations.

If acceptance is pushed into 2009, Cray expects about $100 million less in revenue, as well as a net loss. During the quarter, cabinets for the Oak Ridge supercomputer were delivered ahead of schedule, Cray CEO Peter Ungaro said in a statement. “We have now shifted our focus to completing the installation and achieving system acceptance,” he said.

All true. But sales at the very high end, Cray’s primary focus, are usually quite lumpy, and given their size, this dependency on a few large customers is to be expected. I’m not saying that this is a non-issue; it clearly matters. I’m just saying that profits are good and will keep Cray in business. Is their situation ideal? No. But one shouldn’t discount the good news that is there.

Comments

  1. $100M in revenue and the outcome for the whole year is tight to the machine in Oak Ridge. That’s almost half of the income in one deal, and that’s a lot of leverage for ORNL…

  2. Welcome to the world of HPC. When it comes to millions of dollars on a single deal, having that deal happen in one quarter vs the next can be a big thing. I’ve worked for several different HPC vendors and contractors, so I’ve seen some interesting situations. It can be a bloody fight of give me this and give me that and I’ll sign off the acceptance, or we can debate this for months and months, and oh ya, that multimillion dollar check, well you don’t get that till the end. So much for you showing profit this quarter/year.(-;

    Some of the back door deals I’ve seen made to get through acceptance over the years would make a polititian cringe.

    I’m not saying it always happens. I’m just saying I’ve seen it happen, and it can be ugly.

    Again. Welcome to the world of HPC.

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