Results 1 to 8 of 8

Thread: Sun going out of business????

  1. #1

    Sun going out of business????


    Technology - Reuters

    Sun Returns to Profit, Sees Another Loss
    Thu Jul 18, 8:17 PM ET

    By Peter Henderson

    SAN FRANCISCO (Reuters) - Computer maker Sun Microsystems Inc. reported on Thursday its first quarterly profit in a year but forecast another loss as it fights for deals in the midst of the technology downturn.

    Santa Clara, California-based Sun, which makes computers that manage networks, said it had missed profit-margin targets but beat Wall Street revenue expectations, in part, because it had cut prices in the current, tough market.

    "People think we're getting squeezed, yet we're gaining share," Chief Executive Scott McNealy crowed in a conference call, repeating Sun's mantra that the key is to do better than rivals like International Business Machines Corp.

    Shares of Sun dropped in after hours trade to $4.90 on Instinet from a close of $5.80 on the Nasdaq, where they had gained just over 2 percent during the day.

    "The stock needs economic recovery to succeed," said Alan Loewenstein, co-portfolio manager, of the John Hancock Technology Fund, which owns Sun shares.

    "Investors want to see sequential earnings growth which won't happen in the September quarter based on current expectations."

    Sun reported a profit of $20 million or 1 cent per share, compared with a loss of $88 million or 3 cents per share in the fiscal fourth quarter a year ago, when the Internet-fueled computer upstart posted its first loss in a decade.

    Sun earned $28 million, or 1 cent per share, excluding an $18 million loss on equity investments, a $4 million credit for adjustments to restructuring charges, and a $6 million benefit for related tax effects.

    Revenues were $3.4 billion compared to $4 billion in the year-earlier quarter.

    Analysts polled by Multex had expected on average a profit of 1 cent per share on revenue of $3.3 billion, with a range of forecasts per share from a 1-cent loss to a 2-cent profit.


    Sun has cut jobs and trimmed costs to lower its break-even point, but its gross profit margin fell from the previous quarter to 41.1 percent of sales in the fourth quarter. The company had forecast a slight improvement on the previous quarter's 42.1 percent.

    Chief Financial Officer Steve McGowan forecast a slight loss in the current quarter, as revenue fell 10-15 percent and margins were steady. He saw revenues rising 10-15 percent for the full year and earnings of 10-15 cents per share.

    Analysts polled by First Call, on average, had seen fiscal 2003 earnings of 17 cents per share.

    Executives defended the late-quarter surge in revenue, saying they had not cut prices to make up for a shortfall or stolen from the first quarter to "overcook" sales.

    "Our intention is to take market share," McGowan said. "The state of the economy is still unchanged and uncertain."

    He added to reporters: "It is very difficult selling. It is very challenging. It is very price competitive."

    Shares of Sun have fallen more than 50 percent this year, compared with a nearly 30 percent fall for the American Stock Exchange Computer Hardware index <.HWI>.

    The company also announced Masood Jabbar, head of the global sales operations, was stepping down -- following retirements by a number of his colleagues -- and would be succeeded by the European sales chief, Robert Youngjohns.

    That raised a flag for Lehman Bros. analyst Dan Niles, who had been disappointed by Sun's guidance but pleasantly surprised by its competitive performance.

    "Sun's got a lot of people, but it's lost a lot of good bodies," he said. "I look at it this way: the people who are leaving know the company a lot better than I am ever going to." -Dan Niles

    I dont know for sure, but apparently they are having alot of monetary problems. I hope they dont go out of business. What do you all think?

  2. #2
    Senior Member
    Join Date
    Jun 2002
    like most, they've been hurting for awhile. the biggest issue, i think, is not stock losses and/or sales, but the loss of some very key employees (rather than the masses - it's the 6 or 7 people that they've lost that really made up what Sun was about and where it was going.)

    if they can withstand the same pressure everyone else is facing financially, they'll be in a very good position coming out (with a much more diverse market than they've ever been privy to holding before) - but they're going to need some people to continue driving the Sun initiative to really benefit from it.

  3. #3
    they were big when they were ahead of the pack, now they arent. they cant seem to get back ahead were there technology is worth the cost, and is more advanced. diversification have not they done.

  4. #4
    im going to miss them, and i have a feeling they are about done for.. :*(

  5. #5
    Senior Member
    Join Date
    Feb 2002
    they ain't dead yet..

    But one thing I've always hated about them is the fact that they dont support their
    own products just mere years after a newer product is released..
    I have to fix old boxes (sun2,sun3, sparc20's.. etc) and to get parts you have to go
    to outside repair vendors..

  6. #6
    true, but the brought us solaris... even though they aren't big spenders.

  7. #7
    Senior Member
    Join Date
    Oct 2001
    Sun have made some very poor choices on the business side of things lately. From what I've heard a lot of their recent products have had compatibility problems with other hardware and software configurations. Usually the default configurations work fine but if you want to extend the functionality of something Sun doesn't support it. Now that its really beginning to impact their bottom line, maybe they'll think about putting out some better quality products.
    OpenBSD - The proactively secure operating system.

  8. #8
    Senior Member
    Join Date
    Jun 2002
    i really don't see sun going under - they might be bought out...but no-one is going to let Sun or the Sun technology just die. there are too many solaris, sunos, and sun hw byproducts out there.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts