Cray reported its financial results for the quarter ended June 30, and I imagine that there’s corks a-popping at Cray’s Spokane, WA office. They’ve reported a quarterly profit for the first time since the Q3’08.
Cray Inc. (NASDAQ: CRAY) today announced financial results for the second quarter ended June 30, 2009. Revenue for the quarter was $62.7 million compared to $46.7 million in the prior year period, an increase of 34 percent. The company reported net income for the quarter of $3.4 million or $0.10 per share compared to a net loss of ($6.4 million) or ($0.20) per share in the second quarter of 2008.
Total gross profit margin for the second quarter of 2009 was 45 percent compared to 33 percent in the second quarter of 2008. Product margin was 47 percent, driven by product mix and favorable costs on large system upgrades and contract closeouts. Service margin was 42 percent in the second quarter of 2009.
Cray has had strong financials lately, buying back all of its outstanding debt at a discount during the financial crisis, buying back underwater options from employees, and generally keeping its house in order. The news on the company’s year to date is also generally positive with revenue up considerably and net losses down considerably
For the six-month period ended June 30, 2009, Cray reported total revenue of $137.2 million compared to $72.9 million in the prior year period, an 88% increase. For the first half of the year, total operating expenses were $45.4 million compared to $44.0 million in the prior year period. Net loss was ($1.5 million) or ($0.04) per share for the first half of 2009 compared to a net loss of ($18.4 million) or ($0.57) per share in the prior year period. The 2009 year-to-date net income results include $3.4 million of stock compensation and $1.7 million of non-cash items related to the new accounting for our convertible notes.
The company is cautiously optimistic about their potential to be profitable for the year.
Based on the above current revenue, margin and expense assumptions, a modest income from operations for 2009 is likely.
Although Cray is working hard to diversify the revenue base, its income is still strongly driven by acquisitions of high-end machines. It would only take schedule slips on a couple of key acquisitions — and customer slips are completely out of Cray’s control — to turn the year from “modest income” to net loss.