DOW JONES NEWSWIRES
Sun Microsystems Inc. (JAVA) swung to a fiscal fourth-quarter
loss - its fourth in a row - on lower sales and margins in what may
be its last quarterly report as an independent company.
The loss was smaller than Sun predicted last month but the
revenue was in line with its guidance.
Oracle Corp. (ORCL), which is close to completing a $7.38
billion deal to buy Sun, continues to predict the acquisition will
boost its profit.
Once one of Silicon Valley's most influential companies, Sun
reacted later than competitors to a shift to low-price server
systems. More recently, the hardware and software maker suffered
more than competitors because many customers were concentrated in
the hard-hit financial-services sector.
After a much-ballyhooed deal with International Business
Machines Corp. (IBM) fell through, Oracle offered $9.50 a share.
The deal is expected to close this summer.
For the quarter ended June 30, Sun reported a loss of $147
million, or 20 cents a share, compared with a profit of $88
million, or 11 cents a share, a year earlier.
The latest results included $64 million in restructuring charges
and a $15 million write-down of goodwill and other intangible
assets. The prior-year results included $104 million in
restructuring charges.
Excluding stock-based compensation and acquisition-related costs
and other items, the loss was 3 cents a share compared with
earnings of 35 cents a share a year earlier.
Revenue dropped 31% to $2.63 billion.
Last month, Sun projected a loss of 6 cents to 16 cents a share,
excluding items, on revenue of $2.58 billion to $2.68 billion,
below what Wall Street was expecting at that time. Analysts' latest
estimates were for a loss of 9 cents a share on revenue of $2.8
billion, according to a poll by Thomson Reuters.
Gross margin fell to 40.5% from 44.3%, while inventories
decreased 17%.
Product revenue fell 38% while services revenue declined
18%.
Sun's shares slid 0.2% to $9.32 in after-hours trading. The
stock has more than doubled this year.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com