DOW JONES NEWSWIRES
Sun Microsystems Inc. (JAVA), in what may be its last quarterly
report as an independent company, posted a wider fiscal
third-quarter net loss, continuing the streak of red ink that
pushed it into the arms of Oracle Corp. (ORCL) last week.
Once a giant in Silicon Valley, Sun has seen sales slump for its
servers as customers pared back spending on its high-end products
when competitors swooped in with cheaper options. After a
much-ballyhooed deal with International Business Machines Corp.
(IBM) fell through, Sun found itself a buyer in Oracle, for $7.38
billion. The deal is expected to close this summer.
Meanwhile, for the period ended March 30, the hardware and
software maker posted a net loss of $201 million, or 27 cents a
share, compared with a year-earlier net loss of $34 million, or 4
cents a share. Excluding items such as tax and restructuring
charges, the loss was 7 cents, compared with a 17-cent profit a
year ago.
Revenue dropped 20% to $2.61 billion, though the company said
software billings shot up 28%.
Analysts polled by Thomson Reuters had been expecting a loss of
19 cents a share on revenue of $2.86 billion.
Gross margin slid to 42.7% from 44.9%.
Oracle swooped in to buy up Sun for $9.50 a share, a 42% premium
to the prior close, highlighting the trouble Sun had found itself
in. The shares traded in June as high as $16.37 before tumbling to
a low of $2.60 in November as the economy plagued results.
The company had been shopping itself to giant technology firms
after saying it was slashing 6,000 jobs and trying to refocus on
open-source technology as a way to return to profitability.
Exposure to financial institutions plagued results as did pressure
from competitors.
-By David Benoit, Dow Jones Newswires; 201-938-2472;
david.benoit@dowjones.com