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Sun lost $201 million last quarter, though results better than some expected [San Jose Mercury News, Calif.](San Jose Mercury News (CA) Via Acquire Media NewsEdge) Apr. 28--Sun Microsystems on Tuesday reported a net loss of $201 million as sales fell 21 percent in the last quarter, reflecting what analysts described as Sun's unique problems and the effects of a global recession. The numbers also illustrate the challenges Sun poses for its future owners. Business-software giant Oracle announced earlier this month that it will buy Sun, which makes server computers, storage systems and software, for $7.4 billion in a deal that is expected to close this summer. Sun reported $2.6 billion in revenue for the quarter that ended March 29, down from $3.3 billion in the same period last year. It had a net loss of $34 million in the same quarter last year. Total sales were below analysts' forecasts, although the net loss was not as bad as some expected. Sun said the loss amounted to 27 cents per share. Analysts polled by Thomson Reuters had forecast a net loss of 35 cents per share on revenue of $2.9 billion. Santa Clara-based Sun has been struggling for profitability in recent quarters. Sales of its high-end servers, its biggest source of revenue, fell by 28 percent in the quarter, compared with last year. Several analysts had predicted sales would decline further after reports in March that Sun was in talks to be acquired by IBM, as customers held off making purchases because of uncertainty over Sun's future. After the IBM talks collapsed, Oracle entered the negotiations and announced April 20 that it will buy Sun for $9.50 a share. The two companies said the deal is worth $5.6 billion after accounting for Sun's debt and $2.9 billion in cash. While Oracle CEO Larry Ellison cited Sun's software as a leading factor in the deal, his executives also have vowed to improve the profitability of Sun's hardware business. George Weiss, an industry analyst at the Gartner research firm, noted that sales of even Sun's newer server models declined from the previous quarter. He added: "It makes it a very difficult turnaround." But analyst Ronald Gruia of Frost & Sullivan noted that many big tech companies are feeling the recession: "In all fairness to Sun, it's a very tough environment." Sun's stock, which shot up after the Oracle deal was announced, closed Tuesday at $9.16. It fell slightly in after-hours trading that followed the earnings announcement. |