Sun Microsystems Sales, Profit Beat Forecast
Sun Microsystems Inc., the largest maker of computers that serve up Web pages, Thursday reported a quarterly profit that trounced analyst forecasts, propelled by strong server sales.
Sun Microsystems said operating profit jumped 67% to $659.5 million, or 39 cents a share, for its fiscal fourth quarter ended June 30, from $395.3 million, or 24 cents, a year earlier.
Sales rose a whopping 42%--far exceeding most Wall Street estimates--to $5.02 billion from $3.54 billion.
The results easily topped an average forecast of 33 cents a share, according to First Call/Thomson Financial.
Sun Microsystems, one of the Internet’s four leading infrastructure players, has been benefiting in the last few years from the explosive growth of the Internet, where powerful computers are required to deliver Web content to users and are also used in computer networks. The 42% sales growth also sets it apart from rival IBM Corp., which Wednesday reported a 1% decline in sales for its second quarter as hardware sales fell 5%.
Palo Alto-based Sun saw revenue gains in every portion of the world where it sells its computers, workstations, software and professional services. Sales in the United States soared 42% to $2.71 billion and in Europe 39% to $1.34 billion. They climbed 49% to $337.3 million in Japan and were up 45% to $633.6 million in the rest of the world.
Orders soared 54% to $5.64 billion while its backlog jumped $622.2 million to $1.84 billion at the end of the fourth quarter from $1.21 billion at the end of the third.
Sun also upped the ante for its fiscal 2001, saying that it now expects sales growth in the full year to be “pushing 30%,” up from earlier guidance of roughly 25%. Chief Financial Officer Michael Lehman told analysts on a conference call that analysts and investors can expect greater-than-forecast earnings for the full year.
Sun shares rose $4.13 to $98.06 in trading on Nasdaq. The stock has traded in a 52-week range of $32.94 to $106.75. It released the results after the close of regular U.S. trading. On Instinet after the results were released, Sun stock hit $103.56.
At a Glance
Other earnings, excluding one-time gains or charges unless noted, include:
* Adaptec Inc., the No. 1 designer of electronic cards that speed computer communications, said fiscal first-quarter profit dropped 28% to $34.7 million, or 33 cents a share, missing analyst forecasts of 38 cents, as it struggled with a shortage of microprocessors and computer motherboards. Sales fell 4.7% to $183.4 million. The earnings figures exclude costs for acquisitions, stock compensation and the proposed spinoff of its software business, as well as gains on the sale of land and stock.
* Computer Associates International Inc. said profit plunged 69% to $84 million, or 14 cents a share, in its fiscal first quarter and lowered expectations for the second quarter and full year. The results beat Wall Street expectations of 13 cents, but were a far cry from the 55 cents analysts had expected before July 5, when the company warned that delayed contracts for mainframe software and weak European sales would hurt revenue and earnings.
The company now expects second-quarter earnings in the high 50-cent a share range, versus the 64 cents analysts had expected. It revised full-year earnings expectations down to $2.70 a share from $2.85.
Contract revenue was $1.28 billion, in the range of $1.25 billion to $1.3 billion CA forecast two weeks ago. That contrasted with $1.22 billion a year ago. Before the warning, most analysts were expecting $1.6 billion in contract revenues.
* CNet Inc. said second-quarter earnings dropped 54% to $2.5 million, or 3 cents a share, beating expectations of 1 cent a share. Revenue was up more than $52.2 million from $25.6 million, beyond analyst expectations.
* Handspring Inc. reported a fiscal fourth-quarter loss that widened as expenses increased. Revenue was $51.8 million, versus nil a year ago. The company, which went public a month ago, said that including expenses for amortization of deferred stock compensation, Handspring had a loss of $19.5 million, or 43 cents a share, compared with a loss of $4.23 million a year ago, according to regulatory filings.
* Inktomi Corp. reported a fiscal third-quarter profit of $4.5 million, or 4 cents a share, beating estimates of 2 cents, as sales soared to $61.5 million from $20.3 million. Inktomi posted a loss of $8.8 million, or 9 cents, a year earlier.
* PeopleSoft Inc. reported second-quarter net income of $15.9 million, or 6 cents a share, versus a loss of $542,000, or break-even on a per-share basis, a year ago, as revenue rose 16% to $420.2 million. The results beat forecasts by 1 cent.
* SDL Inc., a fiber-optic parts maker that agreed to be bought by rival JDS Uniphase Corp., said earnings soared to $27.2 million, or 33 cents a share, from $6.14 million, or 9 cents, beating estimates of 30 cents. Revenue more than doubled to $110.5 million from $43.2 million.
* THQ Inc. said it had a second-quarter loss of $1.88 million, or 10 cents a share, contrasted with net income of $3.87 million, or 20 cents, because sales fell while players waited for new game consoles to arrive. The video-game software maker’s revenue plunged 37% to $32.4 million. Analysts expected a deeper loss of 14 cents.
* Xilinx Inc., the No. 1 maker of programmable logic chips, said fiscal first-quarter profit soared 82% to $93.8 million, or 27 cents a share, two cents better than forecasts, as revenue jumped 73% to $364.9 million.
