Sun Microsystems made a Q1 loss, as expected, of $180 million. The biggest quarterly loss in its history. The company had made a profit of $456 million a year earlier.

Sales for the period, ended 30 September, dropped to $2.86 billion, which was at the high end of the company's lowered targets, but 43 per cent down on the period a year earlier.

This follows the announcement earlier this month that it was going to can 9 per cent of its 42,000 staff, an unprecedented number in the company's history. In the results statement Sun CEO, Scott McNealy said the company was going to 'resize' some areas of the company "to help ensure the long-term health of the business". He stressed he's going to protect field sales and service, and R&D.

The company also stressed it has $6 billion in the bank, and blamed lower demand, rather than competition for the situation.

"The computer industry continues to consolidate and downsize but Sun will stay focused on developing the technologies and products that have been the hallmark of our company," said McNeally.

Low-end servers will be launched at the end of the month - Daktari and Cherrystone 4-way and 8-ways, in other words - and a big storage revamp is due in early December.

Until this year, Sun last suffered an unprofitable quarter in 1989. ®

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