NEW YORK (CNN/Money) -
Four straight money-losing quarters came to an end for Sun Microsystems Thursday when the maker of servers that run corporate computer systems posted fourth-quarter earnings that met Wall Street estimates.
But the company, whose share have tumbled over the past 52 weeks, forecast a current-quarter loss, saying it sees no solid pickup in spending on new information technology.
Sun stock plunged 16 percent after hours
Sun posted a June-quarter profit of $28 million, or 1 cent per share, excluding one-time items. The figures, which matched Wall Street forecasts, are a big improvement over the year-ago loss of $88 million, or 3 cents per share.
Still, the corporate slowdown in new technology spending took a toll on Sun (SUNW: Research, Estimates), whose fourth-quarter sales slipped 14 percent to $3.4 billion.
In a conference call with investors, Sun CEO and President Scott McNealy credited the first profit in a year to Sun's ability to wrestle market share from rival IBM (IBM: Research, Estimates).
"We are gaining big, huge market share," said McNealy.
But Stephen McGowan, the company's new chief financial officer, said sales in the current quarter should slip from the last quarter. And he sees a "slight" first-quarter loss.
"We see no change in the current IT spending environment," McGowan said.
Sun, McGowan said, expects to cut 1,000 jobs, or 2.5 percent of its work force, by December. He promised a more detailed first-quarter outlook on Aug. 29.
Off 73 percent from their 52-week high, Sun (SUNW: Research, Estimates) shares slipped a 90 cents to $4.90 after hours.
Purchases of servers, software and networking equipment have tumbled as companies cut costs as business slows. Some of the Internet and telecommunications companies that were big Sun customers in the 1990s no longer exist.
But Sun's sinking stock price goes beyond tough business conditions, with investors unnerved by a series of executive departures.
Mike Lehman, Sun's chief financial office, Chief Operating Officer Edward Zander and John Shoemaker, executive vice president of the company's core computing systems business, announced their resignations earlier this year.
Sun's latest results did not include an $18 million loss on stock investments. They also omitted a $4 million credit for adjustments to restructuring charges, and a $6 million tax benefit.
For the full year, Sun's sales tumbled 32 percent to $12.5 billion. The company lost $628 million in its recently ended year.
In the latest quarter, U.S. sales drove profits. Sales in Japan feel 44 percent year over year.
"We see Europe as continuing it be soft," McGowan said.
As for market share, the company provided data from the IDC World Computer report showing that in the first quarter of 2002, Sun's share of the Unix server market by sales rose sequentially to 33.6 percent from 26.7 percent.
But it's clear that Sun remains most focused on catching IBM, the No. 1 technology company by sales.
"The bear is pretty strong in the computer business," McNealy said, referring to the tough market. "But we are outrunning the other hikers."