DowJones MarketWatch profiles Cray

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Just saw this piece from DowJones MarketWatch last week profiling Cray with the title “Cray feeling super amid company turnaround.”

Cray Inc., on the heels of a major $50 million customer installation at Lawrence Berkeley National Laboratory, expects to be profitable in 2008, which would be its first profitable year since 2003. That would be a major feat for a company that makes some of the world’s costliest computers in a niche market of high-performance computing.

Therese Poletti actually does a pretty good job of summarizing where the company is now, and where it could be going. What are analysts saying about the company?

The company swung to a profit of $5.1 million for the third quarter after losing $8.3 million a year ago. Revenues grew to $55 million, from $32.6 million a year ago. James McIlree, an analyst with Collins Stewart, said the stock lacks a near-term catalyst and he lowered his 2008 estimates to 25 cents from 45 cents a share, due to expected higher research costs.

“It is tempting to get back in the stock at current levels,” he wrote in a recent report. “But we prefer to wait, since there are substantial risks ahead.”

Others are slightly more optimistic. Kevin Hunt of Thomas Weisel believes the stock could reach $9 a share in the next 12 months, with potential risks including product delays, government funding issues and slower growth in the high performance market.

Worst quote?

“Cray goes first class when we build a machine,” said Jan Silverman, senior vice president, corporate strategy and business development, at Cray. “We build them like people build a fine automobile.”

Sure Cray is aiming at the high end, and they’re being very up front about it (see my coverage in this week’s HPCwire special issue where I talk about this with CEO Pete Ungaro). But there’s a difference between paying $10,000 for a watch because it’s the best time piece in the world, and $10,000 because it is encrusted with diamonds. In the first case you’re buying a piece of high end equipment that suits your very particular needs; in the second you’re being an elitist show-off.

Cray is (perhaps surprisingly) not an elitist company. Silverman’s quote brings visions of diamond-encrusted watches to my mind. I’ve met Jan several times, though, and for what it’s worth I’m sure that this is not what he intended to convey.