It's been a tough week for tech stocks and a tough week for the stock market. One tech company providing a bright spot for investors was SGI, which saw its shares soar more than 26 percent Friday after reporting earnings that exceeded expectations.
The company reported revenue of $195.5 million for the quarter ended June 300, along with profits of 12 cents a share, well ahead of Wall Street's estimates of $160 million and a loss of three cents. SGI closed at $15.10 per share, up $3.17 (26.5 percent) in trading Friday.
Growing Role for Technical Computing
CEO Mark Barrenechea said SGI was benefiting from the increased reliance upon technical computing and high-density server environments.
"We are on the leading edge of a trend where more and more things are being modeled or simulated in a computer," said Barrenechea. "Everything from potato chips to nuclear arsenals are modeled on a computer. The total market is large, $19 billion, and growing at 8 percent per annum. SGI is in the right industry."
Last week SGI closed on the acquisition of OpenCFD, which will allow the company to work more closely with customers on the ue of comutational fluid dynamics (CFD) to create airflow models of high-density data center space. OpenCFD is the provider of OpenFoam, the leading open source application for CFD modeling.
"We see an opportunity to change the landscape of fluid dynamics by providing an integrated CFD solution and expanding the availability of CFD codes," said Barrenechea. "We will bring to our customers a variety of options: an integrated and optimized CFD solutions consisting of our hardware, software and services; trusted production binaries through a subscription fee service; professional services for migration, training and new solvers; and a community version of OpenFoam."