Sun 'scorches' Wall Street
Published: 15 Oct 2004 09:25 BST
Sun Microsystems beat analyst targets for its most recent quarter, but revenue was lighter than expected and the company made more layoffs than it had previously announced.
Including an $82m charge relating to the settlement of a Kodak patent lawsuit and other charges, Sun had a loss of $174m, or five cents per share, for the fiscal first quarter ended 26 September.
Excluding those items, however, the server and software company reported a profit of $13m, or break-even earnings per share. That compares with an average of a loss of 3 cents expected by analysts polled by Thomson First Call.
"We scorched what the Street had us looking at," chief financial officer Steve McGowan said in an interview on Thursday. Sun's stock closed down five cents, or 1 percent, at $3.97 on Thursday, but in after-hours trading rose 12 cents, or 3 percent, to $4.09.
Revenue increased 3.6 percent to $2.63bn, the second consecutive quarter of revenue growth for the company, but was lighter than the $2.71bn that analysts had expected.
The company announced a plan in April to lay off 3,300 employees, the third major round of job cuts in a three-year effort to return to profitability. However, the actual number of layoffs was increased to 3,500, McGowan said. So far, 2,900 employees have been dismissed and the remaining 600 have been notified, he added.
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