Sun reports strong profits but little growth
Sun Microsystems doubled
its profit in the quarter ended Dec. 30, although revenue was nearly flat compared
with the same period a year earlier, the company announced Thursday.
Net income for the quarter, the second of Sun's fiscal year, was US$260 million,
or $0.31 per share, up from $133 million and $0.15 per share in the same quarter
of fiscal 2006, the company announced Thursday.
Revenue was $3.62 billion, up just 1.4 percent from the same quarter a year
earlier. The growth came from Sun's services business, where revenue climbed
5 percent. Sales of servers and storage products, which account for about two-thirds
of Sun's business, declined by 0.5 percent.
Business was particularly slow in the U.S., where revenue declined 8 percent
year over year. The Europe, Middle East and Africa (EMEA) region performed better,
with growth of 7 percent. EMEA accounted for 39 percent of revenue in the quarter,
overtaking the U.S., which is usually Sun's biggest source of revenue.
Despite the quarter's slow growth, Sun said its full-year growth would be better.
On a conference call, Chief Financial Officer Mike Lehman said revenue for fiscal
2008 would increase in the "low-to-mid single digits" and predicted
revenue growth in the second half of greater than 5 percent.
Sun's profit benefited from its ongoing cost-cutting plan, which has included
several hundred layoffs so far. Its $260 million profit included a restructuring
charge of $32 million.
Sun announced a surprise plan last week to buy MySQL,
the biggest open-source database vendor, for $1 billion. Sun officials said
Thursday they are unsure whether the MySQL acquisition will close in the second
or third quarter, and have not yet calculated the long-term impact on Sun's
financials. They expect to take a one-time charge of $30 million to $50 million
when the deal closes.
IDG News Service
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