Silicon Graphics says hit by government shutdown

Silicon Graphics cuts outlook, says government shutdown taking toll on business

Associated Press

FREMONT, Calif. (AP) -- Silicon Graphics International Corp. shares fell 15 percent in extended trading Thursday after the computer equipment and services company said that the government shutdown has taken a significant toll on its business.

The company, based in Fremont, Calif., provides technical computing solutions to large government, public, and commercial customers.

Silicon Graphics said that it expects to have earned 2 to 4 cents per share on an adjusted basis in its fiscal first quarter that ended Sept. 27. Total revenue will come in at about $147 million, below its earlier forecast of $160 million to $170 million.

Wall Street had been expecting the company to post adjusted net income of 9 cents a share in the quarter on revenue of $165.5 million, according to FactSet.

The company said that the revenue shortfall was largely due to the federal government shutdown, which led to the freezing of funds for a federal project and delayed acceptance of a non-federal project.

Silicon Graphics said that it expects the government shutdown could cause its full-year revenue to come in 10 percent lower than its prior forecast of $760 million. Analysts had been forecasting $761 million.

The company said it will provide further details on Oct. 30 when it when it releases its full first-quarter financial results.

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