Sun Micro Beats Forecasts

Sun Microsystems Inc. reported fiscal fourth-quarter results Tuesday that beat Wall Street expectations. The server and software maker said demand had stabilized after a long decline that started with the dot-com bust of 2000.

For the period ended June 30, Sun reported net income of $121 million, or 4 cents a share, compared with $783 million, or 23 cents, in the same period in 2004. The year-earlier profit included $1.6 billion from a settlement with Microsoft Corp.

Sun said fourth-quarter sales slipped 4.2% to $2.98 billion.

Excluding special items, the Santa Clara, Calif.-based company earned $200 million, or 6 cents a share, contrasted with a loss of $173 million, or 5 cents, a year earlier.

On that basis, Sun’s earnings beat Wall Street expectations. Analysts were expecting a profit of 1 cent a share on sales of $2.98 billion, according to Thomson First Call.

“It sure feels nice to make money -- that always feels good,” said Scott McNealy, Sun’s chief executive. “We spent the last year getting in shape and succeeding on a lot of fronts and setting the company up for a really successful ’06.”

For the full fiscal year, Sun lost $11 million, or break-even on a per-share basis, compared with a loss of $388 million, or 12 cents a share, in fiscal 2004. Sales for the year fell 1.1% to $11.07 billion.

Following its usual practice, Sun did not release an earnings or sales forecast for the fiscal first quarter.

Sun thrived in the late 1990s as dot-coms and other companies raced to purchase Sun’s proprietary servers and software. But a large chunk of that business disappeared after the tech crash of 2000 and never returned.

Recently, Sun appears to have stabilized, although profitability has been inconsistent. Sun has revamped its hardware and software, including selling servers based on Advanced Micro Devices Inc.’s Opteron chip.

On June 2, Sun said it was buying Storage Technology Corp., a maker of tape drives, network management programs and backup software, for about $4.1 billion. Less than a month later, Sun said it was buying SeeBeyond Technology Corp., a maker of business-integration software, for $387 million.

Shares of Sun, which reported after the market close, were unchanged at $3.85 in regular trading. The stock is down 29% year to date.