Cray announces preliminary 2009 results, hope for break even final numbers

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That headline was tough to write and not mis-state things. Here is the actual quote from Cray’s announcement today

Cray logoBased on preliminary results, total revenue for 2009 is now expected to be about $284 million and earnings are expected to be in the range of about break-even to a small loss from operations. Cash and short-term investments as of December 31, 2009 are expected to be above $110 million. Cray retired all remaining convertible notes during the fourth quarter of 2009.

So, that’s not really a profit, but it might not be a loss. Considering everything the company did this year (debt elimination, new lines of business launched), and the financial conditions of the year in which they did it, I stand by my assertion that this is the healthiest company in HPC, and a healthy company overall.

There are a couple items of interest in this results preview. First, there appear to be problems in the execution of Cray’s HPCS contracts. A “contracting delay” shaved $7M off the books this year, and the changes will evidently create a significant reduction in the scope of the program at Cray

Consistent with this change, certain deliverables will be eliminated from the contract, reducing the overall scope and cost of the project. After the anticipated contract modification, the remaining amount of the contract is expected to be reduced by $60 million, to $92.5 million. As a result of the reduction in overall scope, we expect future research and development expenses related to this program, net of reimbursement, to be lower than previously anticipated.

Also, unfortunately Cray is targeting completion of their next generation “Baker” platform with the “Gemini” interconnect for Q3 of this year, which will push a lot of revenue into Q4. This will create, at best, another lumpy year, and if they miss on Baker or the interconnect (which is not uncommon where new silicon is involved) then 2010 results could be bad.


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