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News > Technology
Sun Microsystems posts tiny profit
Hardware manufacturer basically broke even but sales were lower than expected.
April 16, 2003: 4:24 PM EDT

NEW YORK (CNN/Money) - Sun Microsystems, a maker of networked computers, reported a small profit in its fiscal third quarter, meeting Wall Street's estimates. But sales were lower than expected.

The company reported net income of $4 million, or zero cents per share, on revenues of $2.8 billion. Analysts were expecting the company to break even on sales of $2.9 billion, according to First Call. Sun reported a loss of $37 million, or a penny per share and sales of $3.1 billion a year ago.

Sun Microsystems has struggled during the past few years due to sluggish demand for high-tech products. But investors are also concerned about Sun's ability to remain a leading player in the server market as more hardware companies are producing servers that run on Microsoft software and the open source operating system known as Linux.

Shares of Sun (SUNW: Research, Estimates) fell 3 cents, or 0.9 percent, to $3.33 in regular trading on Wednesday. The stock fell nearly 4 percent in after-hours trading, according to Island ECN.

Despite the lower than expected sales, Sun's gross margins, a measure of how profitable a company is after wringing out costs of sales, were 44.6 percent, compared to 42.1 percent a year ago.

And the company continues to generate healthy amounts of cash. Sun ended the quarter with $5.5 billion in cash and marketable securities on its balance sheet, up from $5.3 billion at the end of its fiscal second quarter.

Still, the company did not provide sales or earnings guidance for its fiscal fourth quarter in the release. Sun announced in January that it would not provide guidance for the remainder of the year.

Analysts expect Sun to earn 2 cents a share on $3.2 billion in sales in its fiscal fourth quarter, compared to a profit of a penny per share and revenue of $3.4 billion a year ago.  Top of page

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