Sun Micro Again In The Red; 3Q Loss Widens On Sales Slump

   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; [e-mail]