NEW YORK (CNN/Money) -
Sun Microsystems barely broke even in its fiscal fourth quarter and reported a larger-than-expected sales decline of 13 percent.
The struggling maker of servers and storage systems earned $12 million in the quarter. Excluding a $24 million loss from investments, Sun reported earnings of a penny per share. Analysts were expecting Sun to post a profit of 2 cents per share, according to First Call.
Sun posted sales of just under $3 billion, below the Wall Street consensus of $3.1 billion, and down from $3.4 billion a year ago.
Shares of Sun (SUNW): Research, Estimates) gained 21 cents, or 4.6 percent, to $4.77, in regular trading Tuesday but tumbled nearly 11 percent in after-hours trading, to $4.25, according to Island ECN.
More tech earnings news
|
|
|
|
For its full fiscal year, Sun reported a net loss of $2.4 billion, which included a $2.1 billion impairment charge to write down goodwill. Sun lost $587 million in fiscal 2002. Sales for the year came in at $11.4 billion, a 9 percent decline from fiscal 2002.
In a written statement, Sun Microsystems CEO Scott McNealy expressed hope that this coming fiscal year would be better. "We enter the new fiscal year with an intense focus toward growing revenue, improving profitability and maintaining positive cash flow from operations," McNealy said.
Sun's balance sheet remains fairly strong, with cash and long-term investments increasing to $5.7 billion, from $5.5 billion as of the end of the third quarter. And during a conference call, McNealy called fiscal 2003 a "pretty good year in many ways."
But Wall Street still is concerned about how Sun plans to stem the declining sales of its server products. Sun is being hurt by competition from servers running on the open source Linux operating system as well as from servers that run on Microsoft software. (For more commentary about Sun's long-term prospects, click here.)
The company did not give guidance for its fiscal first quarter. Analysts are expecting Sun to report earnings of a penny per share, compared to a loss of two cents per share a year ago. The consensus revenue estimate for the quarter is $2.8 billion, a 2.2 percent increase from the same period last year.
Sun CFO Steve McGowan did say during the conference call that Sun expected its research and development expenses to be higher in the first quarter. In the fiscal fourth quarter, Sun spent $482 million on R&D, about 16 percent of total revenue.
Shares of Sun have rallied more than 53 percent this year thanks to the broad tech rally as well as some takeover rumors.
|