Feeds

Sun's Q3 revenue down. Again

Conversations up

  • alert
  • submit to reddit

Intelligent flash storage arrays

Sun Microsystems disappointed analysts and investors with a third quarter loss and lower revenue. Weak sales of storage systems and high-end servers hurt Sun during the period, executives said.

Sun posted revenue of $2.63bn, which is 1 per cent less than the $2.65bn reported last year. On the plus side, Sun managed to shrink its net loss by a massive margin. It reported a net loss of $9m or 0 cents per share. (The net loss included several favorable items such as $54m in extra Microsoft settlement income and $92m in tax benefits.) Excluding charges, Sun reported a net loss of $61m or 2 cents per share. This compares to a net loss of $260m in the same quarter last year when Sun took a large hit for job cuts.

Sun's CEO Scott McNealy tried to promote a longer term view on the company's financial status.

"We made good progress in the third fiscal quarter, but more importantly we're seeing a marked improvement over the first nine months of fiscal 2004," he said. "Break even is a huge move forward from the loss we experienced a year ago. We've made over a $1 billion improvement in net income on a year to date three quarter comparison,"

A number of analysts, however, slammed Sun's inability to drive revenue higher despite a multi-year effort to do so. They questioned why Sun has not made more job cuts and why management appeared complacent with lackluster results.

Sun admitted to shortfalls with its high-end and midrange storage sales and also said that high-end servers did not sell as well as hoped. It also suffered from a 5 per cent year-over-year drop in US sales. The company did see strong growth in its mid-range and low-end Sparc servers along with its Opteron-based systems.

Overall, Sun's product revenue dipped to just $1.68 billion in the third quarter, which compares to $1.71bn in the same period last year. Services revenue rose slightly to $944m this quarter as compared to $940m in 2004.

"Clearly, it ain't like it was during the bubble," McNealy acknowledged.

The Sun chief tried to dispel any notion that the company was satisfied with a quarterly loss, saying no one was "content or complacent." Still, Sun is not going to cut jobs just for the sake of profit at this juncture, McNealy said. It believes that new UltraSparc 4+ chips, new Opteron servers and the release of Solaris 10 will drive business and require a significant sales, marketing and R&D staff.

McNealy also urged analysts and investors to be patient, as customers are starting to buy into Sun's new product strategy.

"The pipeline of interesting conversations is up," he said.

One can only hope this wasn't a reference to the quantity of podcasts being pumped out of Sun, but rather a statement about customer chatter. ®

Related stories

Does regulation work? 'Don't ask me,' says former SEC chief
Cisco to merge with Nabisco
Silent tech majority invites Mickey Mouse to poison P2P
Sun posts one penny profit in Q2, as revenue falls

Secure remote control for conventional and virtual desktops

More from The Register

next story
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Spies, avert eyes! Tim Berners-Lee demands a UK digital bill of rights
Lobbies tetchy MPs 'to end indiscriminate online surveillance'
How the FLAC do I tell MP3s from lossless audio?
Can you hear the difference? Can anyone?
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.