Cray Income, Revenue Jump in 2Q

The supercomputer maker started off the third quarter on a high note, with a $43.1 million co-contract from the federal Defense Advanced Research Projects Agency.

Supercomputer maker Cray Inc. saw net income and revenue both jump in the second quarter, thanks in part to $6 million in revenue that was deferred from the first quarter.

Cray on Thursday reported income of $7.9 million on $61.8 million in revenue for the three months ending June 30, significant increases over the $1.2 million the Seattle-based company earned on $38.6 million in revenue for the same period last year.

But the deferred first-quarter revenue told only part of the story, according to company officials.

"Improved profitability in the second quarter indicates were getting closer to our target business model," Chairman and CEO Jim Rottsolk said in a prepared statement. "With the Cray X1 system now in full-production mode, we are focused on product delivery and successfully meeting increasingly challenging customer acceptance tests for the second half of the year."

Supercomputing is becoming an increasingly competitive area as companies such as IBM, Hewlett-Packard Co. and Sun Microsystems Inc. get into the mix. Announced in November 2002, the Cray X1 is a system powered by up to 4,098 Cray processors that can reach a peak of 52.4 teraflops, or trillion calculations per second. In April, Network Computing Services Inc. became the first customer to buy a full-production version of the system. The next month, Cray officials reported $16 million in orders for Cray X1 equipment and related technology and services.

The company started off the third quarter on a high note, with the federal Defense Advanced Research Projects Agency awarding Cray and fellow Seattle-based New Technology Endeavors Inc. $43.1 million to develop Cascade, a concept that includes hardware and software innovations to create greater memory bandwidth and to speed up the development of new applications while maintaining the performance of current applications.

The DARPA money is part of the Department of Defenses supercomputing push. IBM and Sun also were awarded money.