Sun Says It Has Largest Quarterly Loss Ever
Sun Microsystems Inc., whose servers run Web sites and corporate networks, reported the biggest quarterly loss in its history Thursday amid a sharp sales downturn.
The Palo Alto-based firm said it lost $180 million, or 6 cents a share, in its fiscal first quarter ended Sept. 30, contrasted with a profit of $456 million, or 13 cents, in the period a year earlier. Sales fell 43% to $2.86 billion, the high end of its reduced targets. Excluding certain costs, the per-share loss was narrower than analysts’ forecasts.
Sun said earlier this month that sales missed estimates and that its loss would be wider than expected. Sales had slowed before the Sept. 11 terrorist attacks, and Sun executives said business stalled further in the two weeks after the attacks. Clients have slashed spending, and analysts don’t expect much of a rebound in the next few months as consumer confidence slips.
“It could well be a full year before Sun returns to profitability and perhaps longer,” Rebecca Runkle, a Morgan Stanley Dean Witter analyst who rates the stock “neutral,” wrote in a note to clients last week.
Sun didn’t give a forecast for the current quarter, which ends Dec. 31. A company spokesman said executives will discuss the outlook during a regular mid-quarter call in the first week of December.
In other tech earnings reports for the quarter ended Sept. 30:
* Computer Associates International Inc. said it lost $291 million, or 50 cents a share, in its fiscal second quarter as sales fell by more than half. A year earlier, the Islandia, N.Y.-based software maker reported a profit of $138 million, or 23 cents. Sales fell 53% to $734 million.
* Conexant Systems Inc., the Newport Beach maker of chips for computer modems that dial into the Internet, said its fiscal fourth-quarter loss widened to $238.8 million, or 95 cents a share. A year earlier, the company lost $57.1 million, or 25 cents. Sales plunged 65% to $201 million.
* Corning Inc., the New York fiber-optics maker reeling from a severe slowdown in the telecommunications industry, reported a loss of $220 million, or 24 cents a share, in the third quarter and warned of continued weakness in the fourth quarter. A year ago, Corning earned $254 million, or 28 cents a share. Sales fell 21% to $1.5 billion.
* Cypress Semiconductor Corp., the San Jose-based maker of chips used in telecommunications equipment, reported a third-quarter loss of $362.3 million, or $2.92 a share. A year ago, the company reported a $62-million profit, or 45 cents a share. Sales fell 49% to $180.3 million.
* EBay Inc., the San Jose-based online auctioneer, said third-quarter profit rose 24% to $18.8 million, or 7 cents a share, beating Wall Street expectations. A year earlier, EBay earned $15.2 million, or 5 cents a share. Sales rose 71.4% to $194.4 million.
* Emulex Corp., a Costa Mesa maker of data-storage networking equipment, lost $40 million, or 49 cents a share, in its fiscal first quarter, contrasted with a profit of $12.9 million, or 17 cents, in the year-earlier quarter. Revenue fell 4.9% to $52.7 million.
* Gateway Inc., the troubled San Diego-based computer maker, lost $83 million, or 17 cents a share, in its third quarter, excluding one-time charges. A year ago, the nation’s fourth-largest PC maker reported a profit of $131.8 million, or 40 cents a share. Sales plunged 44% to $1.4 billion.
* Nortel Networks Corp., the biggest maker of phone equipment, said third-quarter losses ballooned to $3.47 billion, or $1.08 a share, from a deficit of $546 million, or 20 cents a share, a year earlier. Sales slid 45% to $3.69 billion.
* SAP, the world’s largest maker of business management software, reported a 55% drop in third-quarter profit to $33.4 million and lowered its full-year growth forecast to 15% from 20%. The German software giant cited lower license revenue, acquisition costs and losses at partner Commerce One Inc. Sales rose 16% to $1.48 billion.
* STMicroelectronics, Europe’s biggest semiconductor maker, said third-quarter profit fell 91% to $35.8 million, or 4 cents a share, because of slumping demand for chips powering devices such as mobile phones and digital cameras. A year ago, the Paris-based company reported a profit of $415 million, or 45 cents. Sales dropped 31% to $1.4 billion.
