Sun calms investors with early Q4 dish
Not as bad as you might have thought
Sun Microsystems has issued an early take on its fourth quarter financial results, showing sales figures that have declined from the same period last year.
The company, which is due to report finalized Q4 figures on Aug. 1, expects revenue to come in between $3.73bn and $3.8bn. During last year's fourth quarter, Sun pulled in $3.84bn. Net income for this year's fourth quarter could come in anywhere between 5 cents and 15 cents in earnings per share, Sun said.
Those figures reflect at $100m restructuring charge, as Sun is in the midst of significant layoffs.
It's a bit surprising to see Sun dish out preliminary fourth quarter results, although it may have viewed the information release as a way of calming investors' nerves. While hardly inspiring, the numbers show that Sun is holding mostly steady even as some prime customers in the financial sector are melting down.
And, in fact, investors have pushed Sun shares higher by almost 10 per cent in after-hours trading, at the time of this report.
"In these difficult economic times, we continue to see customers across the world look to open software and hardware as a source of savings, and feel Sun is well positioned with our most robust line ever of server, storage, software and service offerings,” said Jonathan Schwartz, CEO at Sun.
To Schwartz's point, Sun does in fact have a very solid line of hardware and software going these days, although the company has struggled to attract new sales with the gear. Sun's revenue has declined slowly in recent quarters, while shipments have fallen off at a higher rate.
"Giving the market a taste of their numbers is a good move on their part," Dan Olds, an analyst at Gabriel Consulting, told us. "The stock is close to an all-time low which has to have even the most stalwart investor starting to eye the exits.
"Positive earnings are a good sign, but to me, the most important measure of a technology company is how well or poorly they grow top line revenue - and that's been a weakness for Sun in the past several years." ®
Sponsored: 2016 Cyberthreat defense report