Feeds

Sun profits evaporate as darkness falls on US economy

Investors run despite $1bn share buyback promise

Build a business case: developing custom apps

Sun promised to buy back $1bn worth of shares from stockholders today as it announced static revenues and a slump in fourth quarter profits.

Revenues came in at $3.78bn for the quarter ending June 30, down 1.4 per cent on the year. Profits collapsed though, coming in at $88m, compared to last year’s $329m. This resulted in earnings per share of $0.11. Once charges were flushed through, including around $100m of restructuring costs, EPS came in at $0.35. Wall Street had expected $0.25 per share.

The figures were generally to the top end of the range the company predicted in a nerves steadying statement it put out two weeks ago.

CEO Jonathan Schwartz said that while it was making “significant improvements across a number of key operating metrics” and was showing good non-US growth, the firm had been battered by “slowing performance” in the US.

But Schwartz’s take, and the better than expected EPS, did little to steady investors' nerves, and Sun shares were already down over 8 per cent in pre-market trading at time of writing.

This despite the firm announcing it would spend another $1bn repurchasing shares. Sun said that with $3.3bn in cash and marketable securities on its balance sheet, the buyback “reflects [the board’s] confidence in the continued growth of Sun’s business and an ongoing commitment to increase shareholder value”.

The latest buyback follows a $3bn scheme announced at the end of last year. Sun said there was still $36m of that scheme remaining. There is no expiration date on the current program.

Sun’s statement this morning gave no forecast for the year ahead, other than to say, “we remain confident in open source innovation as the accelerant to our growth strategy through increased adoption of our open source offerings”. In fact, the whole earnings statement only used the word server three times.

For the full year, sales came in at $13.9bn, virtually static on the previous year, with net income at $403m, down on last year’s $473m. ®

The essential guide to IT transformation

More from The Register

next story
Microsoft exits climate denier lobby group
ALEC will have to do without Redmond, it seems
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?