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CRAY RESEARCH ANNOUNCES NET EARNINGS EXPECTATIONS

 CRAY RESEARCH ANNOUNCES NET EARNINGS EXPECTATIONS
 EAGAN, Minn., May 13 /PRNewswire/ -- Cray Research, Inc. (NYSE: CYR)


today announced lower 1992 net earnings expectations as a result of lower anticipated gross profit levels, which could result in earnings 10-to-20 percent below 1991 levels.
 At the same time, the company said it still expects 1992 revenues to grow by about 10 percent and anticipates a substantially improved year- end order backlog.
 Cray Research chairman John A. Rollwagen said the company anticipates a four-to-five percent deterioration of the gross profit margin from planned levels. The deterioration was caused principally by higher component costs on lower volumes for mid-range products; lower yields on new technologies in early production; a product mix moving toward more low-end, lower margin systems; continuing competitive pressures and lower estimates for upgrade business in 1992.
 Rollwagen said the company was instituting several cost-reduction measures to help offset the impact of the lower margins. These measures include maintaining current headcount levels while also limiting operating expense levels to a four percent increase over 1991 into 1993.
 "While we see reduction in net 1992 earnings, our most recent sales forecast remains strong and we have good reason to anticipate significant backlog increase by year-end with improved momentum into 1993. In addition, we have the strongest product line in our history built on an extremely rich and growing technology base," Rollwagen added. He also noted that the company today announced new systems to enhance its mid-range product line and a five to 30 percent price cut for its Y-MP line.
 Despite the anticipated profit reduction, Cray Research continues to be one of the industry's best overall financial performers, Rollwagen said.
 NOTE TO FINANCIAL ANALYSTS: Cray Research will host a telephone briefing for financial analysts at 2 p.m. CDT. You may call 1-800-334-5026 to participate.
 -0- 5/13/92
 /CONTACT: (Media) Frank Parisi, 612-683-7130 or (Financial) Laura Merriam, 612-683-7395, both of Cray Research/
 (CYR) CO: Cray Research ST: Minnesota IN: CPR SU: ERN


KH -- MN012 -- 9779 05/13/92 14:37 EDT
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Date:May 13, 1992
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