SGI Reports $3M Profit, Shares Jump 19 Percent

SAN FRANCISCO (AP) - SGI, a maker of servers and data storage machines, reported quarterly numbers Wednesday that topped Wall Street's forecasts, as corporate spending on technology lifts the battered computing hardware industry.

The company raised its guidance, sending shares up 19 percent in after-hours trading.

SGI, which was known as Rackable Systems until it bought the assets of pioneering high-end computer company Silicon Graphics in 2009, is benefiting from momentum in business spending as are other companies that focus on corporate sales. While consumer demand is dampened by the economy, businesses are replacing aging technologies.

SGI said after the market closed Wednesday that its net income was $3.7 million, or 12 cents per share, in the fiscal second quarter, which ended Dec. 24.

That compares with a loss of $23.0 million, or 77 cents per share, in the same period the previous year.

Excluding one-time items, the company earned 44 cents per share.

Revenue was $177.5 million, nearly double the $94.1 million from the previous year's quarter.

Analysts polled by FactSet expected a penny per share in net income and $141.6 million in revenue.

SGI's new forecast for fiscal 2011 calls for $570 million to $595 million in revenue and for profitable earnings per share, excluding one-time items. That's up from its previous guidance of $550 million to $575 million in revenue and breakeven per share.

SGI shares rose $2.11 to $13.01 in extended trading, after the results were reported. The stock had risen 75 cents, or 7.4 percent, to finish the regular session at $10.90.