Sun turns in another Q1 loss
But what goes up must go up
Sun Microsystems left its Bedazzler® back at the asylum during the first quarter with financial results less spectacular than the company's recent market share gains. That said, the server vendor managed to hand in a solid enough quarter to keep investors calm - a rare feat for the Solaris crowd.
Buoyed by StorageTek and increased server sales, Sun brought in $3.19bn during its first fiscal quarter. That total marks a 17 per cent year-over-year increase from $2.73bn.
The revenue uptick failed to translate into a profit, as Sun posted a $56m loss or a loss of 2 cents per share. In the same quarter last year, Sun lost $123m or 4 cents per share.
Always a cash-conscious firm, Sun reported an influx of $157m, boosting its greenback hoard up to $4.7bn.
"It feels great to continue growing," said Sun's CEO Jonathan Schwartz, during a conference call. Later, he added, "We are off to a great start for the year."
Investors seemed pleased enough with Sun's results not to batter the company in the after-hours markets. At the time of this report, Sun shares were holding steady at $5.36 per share.
As noted yesterday, Sun's shares typically begin their march back down to $4 after the company has disappointed its most gullible fans. But not today.
For that, Schwartz deserves a gold star or whatever you give to a youngster these days after he's had a good run with the finger paints or pooped dead center into the toilet bowl.
During the first quarter, Sun saw hardware and software sales rise to $1.96bn from $1.7bn last year. Services jumped as well, hitting $1.23bn - up from $1.02bn.
Sun won't start breaking out its software revenue figures for awhile yet, Schwartz said. The company, however, declared that software revenue jumped 17 per cent year-over-year. So just make up a figure and have fun with that.
On the hardware front, Sun's UltraSPARC T1-based boxes continued to surprise, reaching $100m in sales for the second quarter in a row. Sun's x86 business slowed but still grew 52 per cent and is now a $600m-a-year enterprise. Sun's SPARC sales rose 10 per cent.
Apparently, IDC data "reaffirmed Sun's progress," although we're still not clear which piece of AI software the analyst firm uses to do its channel checks.
The financial analyst crowd was unusually timid during its conference call with the Sun brass. One analyst asked Schwartz if he would like to discuss how much better the company's products are than those from competitors. He duly obliged.
Even the gravel-throated Laura Conigliaro from Goldman Sachs barked out her questions in dulcet tones. There were no calls for mass firings, the CEO's head or more dinners at nice restaurants.
With a bit of growth behind it, Sun's main problem is clearly that nagging red ink. Management insists that a "prudent" approach has been applied to the business and promises that profitability is in sight.
So, if you're a believer, just squint real hard. ®