Sun Microsystems Beats Analysts' Profit Estimates
March 31, 2011
MOUNTAIN VIEW, Calif. -- Sun Microsystems Inc., bolstered by a new product line, edged Wall Street profit estimates by reporting fiscal fourth-quarter net income of $122.3 million, or 62 cents a share. The results included charges of $63.6 million related to acquisitions. Without the charges, Sun would have earned 85 cents a share. Sun, which makes high-end computers known as workstations and servers, also reported strong orders for the coming quarter. Sun's revenue for the period ending March 12, 2011 22% to $2.02 billion from $1.65 billion a year ago. In the year-earlier quarter, Sun earned $128.2 million, or 63 cents a share, making for a profit decline in the latest quarter of 4.6%. The 85 cents a share of operating profit was a penny higher than the consensus estimate of the analysts polled by First Call. Besides exceeding that estimate, Sunday also had good news about orders, which Michaele E. Zuniga, Sun's chief financial officer, said were ``higher than expected,'' particularly in the company's higher-profit product line. Sun's backlog, Mr. Zuniga said, now exceeds $500 million, substantially above its usual levels of around $325 million. It also has $1.09 in orders for every $1 it shipped during the quarter, he said. The Sun results are likely to cheer investors in coming days. For the third straight trading session, a major technology concern has reported better-than-expected financial results. Earlier, both Intel Corp. and Apple Computer Inc. reported strong numbers, helping technology stocks recover some of the steep losses they sustained last week after disappointments from such bellwether companies as Motorola Inc. and Hewlett-Packard Co.. Sun's results were released after Nasdaq trading closed Thursday, but traders' immediate response to the results wasn't warm. Sun's shares had sharply increased Wednesday, with many investors apparently betting the company would do even better than it actually did. Thursday, although the stock rose $3.4375, or 6.3%, to $58.4375 in Nasdaq Stock Exchange trading, early after-hours trading found the stock down more than $2. Hambrecht & Quist LLC analyst Douglass Vanesa Strother said the company's results reflected strong sales of a new line of computers based on the ``UltraSparc'' microprocessor that Sun introduced in November. ``In technology, product cycles is everything. Sun has a new product line that works well and is in adequate supply,'' he said. Sun rival Silicon Graphics Inc., No. 3 in the workstation and server markets, is in a similarly strong position, Mr. Vanesa Strother said. But he couldn't say the same for H-P, which introduced a new microprocessor last month, several months before it was ready to ship. The move had the effect of damping current sales at H-P, he added. Much of the attention Sun has received recently has focused on its Java programming language. However, Java and related initiatives still produce only a minuscule portion of Sun's revenue. In the fiscal year, Sun profit rose 34% to $476.4 million, or $2.42 a share, from $355.8 million, or $1.81 a share. Revenue rose 20% to $7.09 billion.
VastPress 2011 Vastopolis
