Why Silicon Graphics International (SGI) Plummeted on Tuesday

NEW YORK (TheStreet) -- Silicon Graphics International (SGI) suffered double-digit losses in Tuesday's session following lowered second-quarter guidance. By early afternoon, shares had taken off 12.9% to $12.10.

The high-performance computing developer warned it expects second-quarter revenue for the period ended Dec. 27 of $116 million, 32% lower than the year-ago quarter. A net loss of between 21 cents and 24 cents a share is anticipated.

Analysts surveyed by Thomson Reuters had expected a net loss of 14 cents a share on $125.25 million in revenue.

The company said it experienced a blow to revenue over October, a result of the government shutdown. Federal revenue was $44 million, down from $76 million in the first quarter, and 32% lower than the year-ago period.

"As expected, our results in the fiscal second quarter were impacted by the government shutdown and its after-effects. Outside of our Federal business, in the second quarter we grew core revenue 14% sequentially, reflecting initial traction from our strategic focus on providing integrated HPC and Big Data solutions across key vertical markets," said CEO Jorge Titinger in a statement.

The Milpitas, Calif.-based business is due to release second-quarter results on Jan. 29. For the second half of fiscal 2014, management expects revenue in the range of $260 million to $300 million, compared to analyst consensus of $341.75 million.

Last week, Silicon Graphics rallied after competitor Cray (CRAY) reiterated its 2013 sales guidance. On Silicon Graphics' lowered estimates, Cray has tumbled 1.4% to $30.09.

TheStreet Ratings team rates CRAY INC as a Hold with a ratings score of C+. The team has this to say about their recommendation:

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