Sun steadies the ship

16 Jan 2004

Struggling computer maker Sun Microsystems has stemmed the losses of recent quarters with a solid set of results.

Net loss for the quarter was US$125m or US$0.04 per share as compared with a net loss of US$2.283bn or US$0.72 per share for the second quarter of fiscal 2003. Revenues amounted to US$2.89bn, a sequential increase of 13.9pc but a slight year-on-year decline of 0.9pc as compared with US$2.9bn for the second quarter of fiscal 2003.

Total gross margin for the quarter as a share of revenues was 41.8pc, an increase of 1.7pc points sequentially but a drop of 1.5pc points as compared with the second quarter of fiscal 2003.

“FY04Q2 was a quarter of progress for us,” said Scott McNealy, Sun’s chairman and CEO. “We announced over 20 new products at our SunNetwork conference in Berlin and a significant alliance with AMD that will continue our strategy of using industry economics to deliver extreme performance at compelling price points and puts Sun in a strong product position for calendar year 2004. We continue to be confident that these investments, along with our ongoing focus on operating efficiency and quality, will deliver increasing value to our customers and partners worldwide.”

Steve McGowan, Sun’s chief financial officer, said: “Our sequential revenue growth was the highest Q1 to Q2 revenue growth since fiscal year 1998. Despite competitive pressures, we improved gross margin sequentially due to an ongoing focus on cost management. We ended the quarter with a cash and marketable debt securities position of US$5.2bn after funding the growth of the business this quarter.”

By Brian Skelly