Sun’s loss narrows as revenue rises 17%
Computer maker Sun Microsystems Inc. on Thursday posted a narrower fiscal first-quarter net loss as revenue rose 17%, helped by its acquisition of tape storage company StorageTek and growth in its services business.
Sun forecast that second-quarter revenue would rise “in the high single digits” from the first quarter.
In the last five years, Santa Clara, Calif.-based Sun has completely revamped its product line, embracing Opteron processors from Advanced Micro Devices Inc. for use in lower- to mid-level computers.
Chief Executive Jonathan Schwartz, who took the reins in April from co-founder Scott McNealy, has also cut jobs by some 13% in a bid to help return Sun to profitability.
“Revenue growth was not as high as some had hoped,” said Brent Bracelin, an analyst at Pacific Crest Securities. “The important thing is the company continues toward its goal of reaching profitability.”
Sun’s net loss was narrower than analysts expected. The company noted, in addition to growth in its services business, a 15% revenue increase at its computer systems products business, which includes servers.
Sun reported a loss for its first fiscal quarter ended Oct. 1 of $56 million, or 2 cents a share, versus a year-earlier loss of $123 million, or 4 cents. Revenue rose to $3.19 billion from $2.73 billion.
Analysts polled by Reuters Estimates expected a per-share loss of 6 cents on revenue of $3.18 billion.
According to market researcher IDC, Sun regained the No. 3 ranking in the worldwide server market in the second quarter and boosted its market share to 12.9% from 11.2% a year earlier. Its server revenue growth was 15.5% in the second quarter, far outpacing that of rivals Hewlett-Packard Co., IBM Corp. and Dell Inc.
Sun’s shares have risen 29% this year. On Thursday they rose 6 cents to $5.36.
* Los Angeles-based Teledyne Technologies Inc., which makes flight data products and missile defense systems, said third-quarter earnings rose 44% to $22.6 million, or 63 cents a share, from $15.7 million, or 45 cents, a year earlier, beating expectations.
* Conexant Systems Inc., a Newport Beach-based maker of communications and network chips, said its fiscal fourth-quarter loss widened to $21.1 million, or 4 cents a share, compared with year-earlier net income of $50.1 million, or 10 cents. Profit excluding certain items met analysts’ estimates. Revenue rose 14% to $245.9 million.
* Deckers Outdoors, the Goleta, Calif.-based maker of Teva and Simple brand shoes, said third-quarter earnings rose to $10.6 million, or 83 cents a share, from $8.2 million, or 63 cents, a year earlier, exceeding estimates. Sales rose 19% to $82.3 million, beating analyst expectations of $73.8 million in revenue.
* K-Swiss Inc., a Westlake Village maker of athletic shoes and apparel, said third-quarter profit was flat at $21 million, or 59 cents a share, from $21.1 million, or 59 cents, a year earlier, exceeding estimates. Revenue fell 3% to $133.1 million.
* Citing a change in its tax rate, teen apparel maker Volcom Inc. of Costa Mesa reported a 10% decline in third-quarter profit, which fell to $10.2 million, or 42 cents a share, from $11.3 million, or 47 cents, a year earlier. Revenue rose 19.3% to $61 million.
