Why Cray Inc. Is Exploding on Friday

NEW YORK (TheStreet) -- Cray Inc. (CRAY) shares are soaring after the supercomputer developer reported fourth-quarter and full-year earnings well above consensus.

By early afternoon, shares had exploded 37.7% to $41.28. Trading volume of 2.8 million was nearly seven times its three-month daily average.

Over fiscal 2013, the company posted total sales of $525.7 million, a 25% year-over-year increase. Analysts surveyed by Thomson Reuters had forecast sales of $525.75 million.

Full-year net income of 76 cents a share was a dime higher than consensus.

In the three months to December, the Seattle-based company recorded net income of $1.48 a share on revenue 62% higher year over year to $307.7 million. Analysts had predicted per-share earnings of $1.36 on $300.56 million in sales.

"We had a great year in 2013, led by strong growth in both supercomputing and big data," said CEO Peter Ungaro in a statement. "We set company records for annual and quarterly revenue as we completed the acceptance of more supercomputers during the fourth quarter than we have in any quarter in our history."

For fiscal 2014, management anticipates revenue around $600 million. Analyst consensus is for 87 cents a share in net income and $599.25 million in sales.

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

"We rate CRAY INC (CRAY) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

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