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Sun beats 1Q forecasts
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October 14, 1999: 5:57 p.m. ET
Tech firm exceeds estimates by 2 cents a share amid strong server sales
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NEW YORK (CNNfn) - Sun Microsystems Inc. Thursday recorded fiscal first-quarter profits that beat Wall Street estimates as the company reported market-share gains in Internet servers.
For the quarter, Sun (SUNW) logged an operating profit of $274.8 million, or 33 cents a share. Analysts polled by First Call expected the company to log a profit of 31 cents a share. Revenue climbed 25 percent to $3.1 billion.
The earnings figure excludes a $3.5 million charge for its acquisition of StarDivision Corp. and a $1.3 million tax-related gain. Including those items, Sun earned $271.1 million, or 33 cents a share.
Sun outpaced its year-ago results, when it posted a pro forma profit of $197.9 million, or 25 cents a share, on $2.5 billion in revenue.
Sun shares added 1/32 to close at 89-13/32 prior to its earnings announcement. Its shares climbed to 91-1/2 in after-hours trade.
Serving up profits
Sun, which promotes itself as the "dot" in "dot-com," attributed its strong performance to growth in providing equipment to Internet companies.
"Our success in the first quarter came at the expense of our traditional competitors," said Scott McNealy, Sun's chief executive officer. "We gained share in many of our key markets, especially in servers for the Internet and service providers."
Sun said it expects better than 20-percent revenue growth in the second quarter.
The company also said consumers have downloaded nearly 1 million copies of its StarOffice software suite - which the company gained as part of its StarDivision acquisition - since last month. Sun is hoping the suite will take market share from Microsoft Corp. 's (MSFT) dominant Microsoft Office offering.
StarOffice is the cornerstone of Sun's StarPortal, which the company plans to launch later in the fall. StarOffice, which include a word processor, spreadsheet and presentation package, will be available as a Web-based application from StarPortal.
Sun is giving StarOffice away for free, but the company hopes the suite will trigger revenue from additional server sales as more firms rely on the Web-based package.
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Sun Microsystems
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