Feeds

Price wars, budget cuts and Sun results

Nil visibility

  • alert
  • submit to reddit

High performance access to file storage

Sun Microsystems sales grew just two per cent in Q3, blaming a more competitive market and the downturn in the economy.

The US server and workstation giant recorded revenue of $4.1 billion for the three months ended April 1 2001, around $300 million lower than analysts expectations.

Including charges, net income was $136 million, or four cents per share, compared to $509 million, or 15 cents per share, for the same quarter the previous year.

Excluding charges, pro forma net income fell 43 per cent to $263 million.

Year-on-year, sales dropped 15 per cent in the US, 21 per cent in Japan, 16 per cent in Europe, and 19 per cent in the rest of the world. Sequentially, revenue dropped 33 per cent, 14 per cent, 11 per cent and 16 per cent respectively.

Michael Lehman, Sun CFO, said the results reflected the "sharp decline in capital spending in the information technology sector, principally in the United States, although we did see some moderation of demand in Europe and Asia Pacific".

The competitive environment had also hit gross margins, with discounts offered on systems by competitors much greater than anticipated during the quarter, he said.

For the fourth quarter, Lehman added that the company expected to report "slight" sequential revenue growth, with 15 per cent maximum growth in the next full fiscal year - much of this was forecast to happen in the second half of the year. Earnings growth was also tipped to outstrip that of sales.

The company said its channel inventory was down $200 million and "in its best shape in years".

Sun CEO Scott McNealy commented that "nobody has a clue" where the economy is heading. He said companies needed to be flexible enough to turn aspects of their business on and off quickly, depending on which way the market swung.

Sun said it expected to have the same headcount this time next year as it does now. ®

Related Link

Sun Q3 statement

Related Stories

SunFire servers to trash HP by Friday, says McNealy
Sun claws its way to top of US server market
Sun freezes jobs, sets up cost cuts
Sun posts strong Q2 figures

High performance access to file storage

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
prev story

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.