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Silicon Graphics Shares Up on News of Military Deal

February 19, 2003|From Bloomberg News

Silicon Graphics Inc., whose computers are used in missile-defense systems, said Tuesday that it won a $26-million contract from the Department of Defense. Its shares rose as much as 21%.

The government ordered hardware, software and services for its High Performance Computing Modernization Program, which conducts simulations of weapons and weather, said Tony Celeste, director of Silicon Graphics' defense business.

Silicon Graphics, which has had three straight quarterly losses, has increased revenue from military sales to 35% of its total from 20% about two years ago. Other companies competing for the contract included IBM Corp., Hewlett-Packard Co. and Sun Microsystems Inc.

Shares of the Mountain View, Calif., company rose 16 cents to close at $1.28 on the New York Stock Exchange after rising as high as $1.35. The shares have fallen 54% in the last year.

Sun spokeswoman Kasey Holman declined to comment. IBM and Hewlett-Packard representatives could not be reached for comment.

Silicon Graphics will provide equipment for the Aeronautical Systems Center at Wright- Patterson Air Force Base in Ohio; the Army Engineer Research and Development Center in Vicksburg, Miss.; the Fleet Numerical Meteorology and Oceanography Center in Monterey, Calif.; and the Naval Air Warfare Center's aircraft division in Patuxent River, Md.

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