Feeds

Sun profits evaporate as darkness falls on US economy

Investors run despite $1bn share buyback promise

Next gen security for virtualised datacentres

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. ®

Build a business case: developing custom apps

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
Netflix swallows yet another bitter pill, inks peering deal with TWC
Net neutrality crusader once again pays up for priority access
Judge nixes HP deal for director amnesty after $8.8bn Autonomy snafu
Lawyers will have to earn their keep the hard way, says court
prev story

Whitepapers

Best practices for enterprise data
Discussing how technology providers have innovated in order to solve new challenges, creating a new framework for enterprise data.
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.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
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?