Silicon Graphics International Earnings: Here’s Why the Stock is Falling Now

Silicon Graphics International Corp. (NASDAQ:SGI) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 14.57%.

Silicon Graphics International Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased to $0.17 in the quarter versus EPS of $-0.10 in the year-earlier quarter.

Revenue: Decreased 5.01% to $170.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Silicon Graphics International Corp. reported adjusted EPS income of $0.17 per share. By that measure, the company beat the mean analyst estimate of $0.14. It missed the average revenue estimate of $177.75 million.

Quoting Management: “We achieved another solid financial quarter, capping a year in which we tripled non-GAAP net income and nearly doubled the company’s net cash balance, while repositioning SGI for more profitable growth in fiscal 2014,” said Jorge Titinger, president and CEO of SGI. “In fiscal year 2014, we expect to achieve solid double-digit revenue growth in our core high-performance computing (HPC), storage, and Big Data solutions, while managing the run-off of our lower margin legacy cloud infrastructure business. We are on track with our operational and financial objectives for the year, including further improvement in profitability, however because of the timing of many large deal opportunities as well as the ramp of new products, we expect our financial performance to be weighted toward the second half of the fiscal year.”

Key Stats (on next page)…

Revenue decreased 26.7% from $232.59 million in the previous quarter. EPS decreased 5.56% from $0.18 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.17 to a profit $0.18. For the current year, the average estimate has moved up from a profit of $0.32 to a profit of $0.33 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)