|
Sun 2Q loss beats Street
|
 |
January 18, 2002: 12:25 p.m. ET
Computer maker cites big drop in revenue, sees improvement in current quarter.
|
NEW YORK (CNN/Money) - Sun Microsystems Friday posted a loss for the latest quarter versus a profit a year earlier as the computer maker's sales got hurt by the ongoing slowdown in information technology spending.
The loss in the latest quarter marked only the second time Sun has ever posted an operating loss, according to First Call, the research firm that tracks corporate profits. The company's first loss was in its fiscal first-quarter.
Sun, which makes computers that power the Internet and other big networks as well as high-end workstations, reported a loss of $99 million, or 3 cents a share, excluding one-time items for its fiscal second quarter ended in December. Analysts polled by First Call on average expected a loss of 4 cents per share.
The company earned $494 million, or 15 cents a share, a year earlier. Sales tumbled to $3.1 billion from $5.1 billion.
Sun (SUNW: down $0.14 to $12.23, Research, Estimates) stock fell sharply on the news.
Sun is the latest big tech company to post weak results as customers continue to trim spending on computers and other technology during the recession.
Microsoft Corp. (MSFT: down $3.23 to $66.63, Research, Estimates), the world's biggest software maker, reported better-than-expected second-quarter results after the bell Thursday but said the outlook for 2002 is mixed, given the economy and its legal problems.
Also Thursday, IBM (IBM: down $6.20 to $113.70, Research, Estimates) posted a lower fourth-quarter profit and missed revenue forecasts by $1 billion, citing slow demand for computers and components.
Chipmaker Intel Corp. (INTC: down $0.76 to $33.77, Research, Estimates) said Tuesday it plans to cut capital spending in 2002 because of a cloudy business outlook for the current year.
Sun President Ed Zander told analysts during a conference call Friday that the company was hesitant to turn down orders in the past year from such major customers as Enron Corp., ExciteatHome and Exodus Communications, a strategy that ended up hurting Sun's profits as the fortunes of those customers dimmed. Enron, the bankrupt energy trader, is under a federal investigation for possible accounting fraud.
Including losses in its investment portfolio and a $511 million restructuring charge, Sun's second-quarter net loss was $431 million, or 13 cents a share, compared with a profit of $413 million, or 13 cents a share, a year earlier.
Sun Chief Financial Officer Michael Lehman said during the call that the company expects a slight rise in third-quarter revenue over the second quarter.
"We expect to make progress in Q3 toward our stated goal of returning to profitability by the June quarter," Lehman said, adding that the company continues to experience "extreme levels of competition."
Check technology stocks here
Analysts had been forecasting third-quarter revenue of $3.99 billion, which would be a 29 percent increase from the second quarter, according to First Call. Lehman said the company will provide clearer guidance during its regular financial update in February.
Lehman noted that revenue rose in the second quarter from the first, and inventory was reduced by more than $200 million.
"We generated cash in the quarter on an operating basis, even with the payments we've made on our restructuring," he said in a statement released with the earnings report earlier.
Sun's cash and equivalents total about $6 billion, he said. 
|
|
|
|
|
|
|
