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    Sun Reports $201M Quarterly Loss

    Written by

    Chris Preimesberger
    Published April 28, 2009
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      Sun Microsystems, in the process of becoming the property of Oracle by the end of summer 2009, reported its quarterly earnings April 28. To the surprise of few industry observers, the financial health of the company and the general trend of the numbers remain grim.
      However, although Sun reported a GAAP (Generally Accepted Accounting Principles)-based loss of $201 million in its third-quarter 2009 numbers, the total loss was not nearly as drastic as some of its earnings reports of the past few years, in which the company suffered losses of $500 million and above.
      Sun declined to schedule a teleconference call for investors, analysts, media and other interested parties as it normally does.
      The $201 million loss worked out to 27 cents per share. A year ago in the same quarter, Sun reported a $34 million loss. Revenues for the third quarter of fiscal 2009 were $2.6 billion, compared with $3.3 billion for the third quarter of 2008, short of Wall Street forecasts. The revenue result also represented a drop from the $3.2 billion reported for the second quarter of fiscal 2009.
      Sun said the loss was caused by restructuring charges and a 20 percent drop in sales.
      Positive cash flow in the face of downward sales trends

      “I’m looking at the results in terms of trends,” Gartner Research analyst George Weiss told eWEEK, while checking line items in the report. “The SPARC enterprise [processors] business was way down, and the CMT-chip multithreading; the Niagara T-Class processor line-business took a sharp turn down for the first time. That was one they were counting on [to be positive].
      “Java income was up slightly, but not enough to make any kind of real difference. MySQL flattened out. Sun did report a positive cash flow of $180 million; I’m not sure how they figured that. But overall, it looks like Sun is hemorrhaging; they’re down 20 to 23 percent from quarter to quarter. At that rate, I don’t see how they can survive,” Weiss said.

      Weiss said although Oracle undoubtedly was aware of all these problems when it announced the acquisition April 20, Sun’s financial bleeding is going to continue for the next few quarters, and things are going to get more challenging before it gets better for both companies.
      “The playing field is getting incredibly more difficult to compete on,” Weiss said, “with the macroeconomy, tighter budgets, margins coming down [by 2 percent in the third quarter of 2009] and head counts shrinking, Oracle and Sun have some great challenges to overcome.”

      Chris Preimesberger
      Chris Preimesberger
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor Emeritus of eWEEK. In his 16 years and more than 5,000 articles at eWEEK, he distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.
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