Cray Inc. just posted news of its third quarter financial performance
Cray Inc. (NASDAQ: CRAY) today announced financial results for the third quarter ended September 30, 2009. Revenue for the quarter was $58.6 million compared to $54.6 million in the prior year period, an increase of 7 percent. The company reported a net loss for the quarter of ($2.1 million) or ($0.06) per share compared to net income of $3.6 million or $0.11 per share in the third quarter of 2008.
As we’ve noted before, Cray is the only company that focuses primarily on the high end, so it’s revenues are quite lumpy, and profitability can be driven by a single deal slipping from one quarter to the next. The company had been cleaning up its house by cutting costs and growing margins, which in previous quarters had helped the finances quite a bit. This quarter saw a retraction in product margin (a function of a one-time buy) and a growth in operating expenses that the company also claims is a one-time event
Total gross profit margin for the third quarter of 2009 was 39 percent compared to 51 percent in the third quarter of 2008. Product margin for the third quarter of 2009 was 23 percent and was negatively impacted by a $4.5 million write down (a 14 percent product margin impact) for inventory purchased in 2008 as part of a last-time buy. Service margin was 59 percent in the third quarter of 2009 and benefited from the execution of a contract that allowed us to recognize approximately $3.9 million of revenue for work performed in the prior quarter.
Operating expenses for the third quarter were $27.1 million compared to $22.3 million in the prior year period. As previously anticipated, third quarter 2009 operating expenses increased due to a delayed milestone on a co-funded development contract.
Looking at the nine months just ended and comparing them to the same nine months in 2008, Cray’s revenue is way up ($196M vs. $127M), and losses are down (-$3.6M vs. $14.8M). This is good, but a turn down from the six month year-over-year comparison, which had Cray 88% ahead of last year at the end of Q2. The company has reasonable cash on hand of about $68M.
Projected revenues for all of 2009 have been revised slightly down since the Q2 announcement, by $5M to $285M, and Cray has dropped its hopeful statement that it would achieve operating profitability for 2009.
If you want to tune in and learn more, Cray is hosting its earnings call today
Cray will host a conference call today, Thursday, October 29 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss 2009 third quarter financial results. To access the call, please dial into the conference at least 10 minutes prior to the beginning of the call at 1-877-941-1465. International callers should dial 1-480-629-9678. To listen to the live audio webcast, go to the Investors section of the Cray website at http://investors.cray.com.