Charges Lead to $2.28 Billion Loss for Sun

 
 
By Jeffrey Burt  |  Posted 2003-01-16
 
 
 
Sun Microsystems Inc. took a $2.28 billion loss in the second quarter of fiscal 2003, fueled in large part by almost $2.13 billion in charges related to the reduction in value of companies that Sun had acquired.

The Santa Clara, Calif., company also took a $357 million charge related to restructuring plans, including layoffs. Sun officials hope to cut its worldwide workforce by 11 percent—or about 4,400 workers—during the fiscal year 2003.

Without those charges, the company would have earned $10 million, officials said on Thursday.

Second-quarter revenue was $2.915 billion, a 6 percent drop over the same period last year.

However, company officials said there were a number of highlights during the first half of fiscal year 2003, including the rollout of several UltraSparc III-based servers and the Sun Fire Link interconnect technology.

There also was movement on the software side, including the launch of its N1 initiative, designed to help ease management and increase utilization of data center systems, according to Chairman and CEO Scott McNealy.

"Our focus hasnt changed," McNealy said during a conference call with investors and analysts. "We solve complex network computing problems."

Looking forward, Steve McGowen, chief financial officer and executive vice president of corporate resources, said Sun would follow a trend among major corporations of not giving mid-quarter updates, and said that given the difficult economic environment, he would not speculate on what the current quarter holds.

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