What happened

Shares of supercomputer-systems builder Cray (NASDAQ:CRAY) jumped on Wednesday, rising as much as 17.5%. The stock's gain follows Cray's first-quarter update on Tuesday. Shares are trading about 13.3% higher at the time of this writing.

Investor optimism toward the stock on Wednesday is likely due to Cray's narrower-than-expected loss per share and higher-than-expected revenue for its first quarter. Both metrics were ahead of the consensus analyst estimate for the period.

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So what

Cray reported a first-quarter adjusted loss per share of $0.53, narrower than its adjusted loss per share of $0.71 in the year-ago period and better than a consensus analyst estimate of a $0.57 adjusted loss. 

Revenue for the period was $79.6 billion, up 35% from revenue of $59 million in the year-ago quarter. Cray's top line crushed analyst estimates. Analysts were expecting first-quarter revenue of just $50 million.

Cray's strong revenue growth helped offset the company's narrowing gross profit margin. On both a GAAP and non-GAAP basis, the company's gross profit margin narrowed from 40% in the year-ago quarter to 34% in the first quarter of 2018.

CEO Peter Ungaro said Cray's first quarter marked "a strong start to the year." Specifically, Ungaro said the period represented one of its "strongest bookings quarters in several years."

Now what

Looking ahead, Ungaro said Cray believes its strong bookings are "another early sign that our target market is continuing to strengthen."

Ungaro explained: "Among these new awards, we were selected by the Japanese National Institutes for Quantum and Radiological Science and Technology to deliver our latest generation XC supercomputer to serve as their new flagship system. These are good examples of our strong competitive position, which is key for us to drive growth in 2018 and beyond."

For the full year, Cray expects revenue to rise 10% to 15% compared to 2017. For its second quarter, management forecast revenue of about $110 million -- above the current consensus analyst estimate of $86 million for the period.

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