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CNNfn after the bell
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March 31, 1999: 6:19 p.m. ET
Earnings warnings from two high-tech companies; WD-40 scoops Lava
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NEW YORK (CNNfn) - Several companies reported news after Wednesday's final bell, as two high-technology company issued profit warnings, and WD-40 acquired a well-known consumer brand.
Computer workstation maker Silicon Graphics Inc. said Wednesday it expected to report a fiscal third-quarter loss that is 20 to 25 cents a share larger than Wall Street's current forecasts.
The company, which has been attempting to turn around its operations for over a year, said the latest problems reflect "challenging transitions in both of our principal product lines" -- visual workstations and origin servers.
Although Silicon Graphics (SGI) did not specify how much it expected to lose in the third quarter ending March 31, the consensus among analysts who follow the company was for a loss of 7 cents per share, prior to Wednesday's warning.
Silicon Graphics also said it expected to report third quarter revenues in the low to mid-$600 million range.
In a statement, Chairman Richard Belluzzo said that while the company's new visual workstations have received a "great critical response," there have been delays in production, which have hurt third-quarter results.
Another grim earnings outlook
In other earnings news, Marietta, Ga.-based computer software maker HIE Inc. (HDIE) announced that revenue for the quarter ending March 31 will be in the range of $5.3 million to $5.7 million.
This will result in a loss of 5 to 7 cents per share, well below analysts' consensus estimates of 2 cents per share profit.
The expected quarterly loss of $1.4 million to $1.8 million is the result a shortfall in the company's healthcare software business.
"Our lower than expected software revenue is the result of several existing and prospective healthcare customers notifying us in the final days of the quarter that they were not able to complete their purchasing processes by March 31," said Robert Murrie, president and chief executive officer.
Also projecting a grim earnings outlook was Secure Computing Corp. (SCUR) The San Jose, Calif.-based computer security company said Wednesday it expects to report a first quarter loss due to lower than expected revenues.
The company said in a statement it expects total first quarter revenues will be about 36 percent below the $12.8 million reported for the year-ago quarter, resulting in a loss, before charges, of 30 cents per share.
Analysts had expected the company to report a profit of 10 cents per share for the quarter, compared to 3 cents per share in the year-ago quarter, according to First Call.
After the non-cash stock option expense charge of about $4.7 million, the company expects to report a net loss of 58 cents per share for the latest quarter.
It said the lower revenues were due to delays in closing several large deals which are now expected to close in the second quarter, a lengthening of the sales cycle on enterprise level deals and normal seasonality.
WD-40 brimming with Lava
And finally, WD-40 Co. said Wednesday it has agreed to acquire the Lava brand of hand soap from Block Drug Co. Inc. for an undisclosed sum.
"This acquisition is a perfect match that takes advantage of our core competencies, and yet marks a new era for our company," said WD-40 President Garry Ridge. "Lava and WD-40 share a similar base of end-users, and we know them very well."
The purchase will be financed with a credit facility from Union Bank of California.
WD-40 (WDFC) makes multipurpose lubricants, including WD-40, 3-in-One Oil, and TAL 5, a premium, long-lasting lubricant.
Block Drug (BLOCA) is a worldwide maker and seller of personal hygiene products including Sensodyne toothpaste, Polident and Poli-Grip denture products and Phazyme for gas relief.
- from staff and wire reports
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