Sun posts net loss for second quarter
- By John Moore
- Jan 25, 2006
Sun Microsystems posted a net loss for the second quarter of its fiscal year but reported a revenue gain on the strength of recent acquisitions.
The company lost $223 million in the quarter that ended Dec. 25, 2005, compared with a profit of $4 million a year earlier. The 7 cents-per-share net loss contrasts with break-even share results in the previous year’s second quarter.
Sun’s revenue grew 17 percent to $3.34 billion from $2.84 billion last year. The August 2005 acquisitions of SeeBeyond Technology and StorageTek accounted for most of that growth, according to Sun. Both of the acquired companies generate significant revenue from the government market.
But revenue from Sun’s traditional product business declined. Revenue from its computer systems segment dropped 5 percent in the last quarter, according to the company, and stock analysts have questioned the company’s ability to increase product revenue.
However, company officials cited improvements in business fundamentals. Steve McGowan, Sun’s chief financial officer, said the company has witnessed a positive trend in bookings and backlogs for its server and data management product lines. He attributed the bulk of that growth to StorageTek, although he noted that Sun’s traditional products also saw an uptick in bookings.
Sun posted the biggest gains in stock price in a two-week snapshot of the FCW Tech Index, but that period concluded last week. The company’s stock opened today at $4.30 a share, down from a $4.37 closing price Jan. 24.