To print: Click here or Select File and then Print from your browser's menu

This story was printed from silicon.com, located at http://www.silicon.com/

Story URL: http://hardware.silicon.com/servers/0,39024647,39167998,00.htm

Sun swings to quarterly profits
Into the black...

By Reuters

Published: Tuesday 31 July 2007

Sun Microsystems said it has swung to a quarterly profit from a year-earlier loss as it reduced costs, sending the shares higher.

The stock rose 12 per cent to $5.47 in extended trading following the profits report after closing down 0.6 per cent at $4.89 on the Nasdaq.

Earnings of 9 cents per share beat the analysts' average estimate of 5 cents per share. Net income was $329m in the fourth quarter ended 30 June, compared with a year-earlier net loss of $301m, or 9 cents per share.

Revenue rose slightly to $3.84bn, matching analysts' estimates, from $3.83bn, while operating expenses fell 25 per cent to $1.49bn.

Sun, which returned to profit in the second and third quarters after five consecutive quarterly losses, has tried to stage a recovery by revamping its product line, selling servers powered by chips from AMD and Intel, among other moves. The company last year announced about 5,000 job cuts to reduce costs.

Shares of Sun have fallen 9.2 per cent this year, as of Friday's close.

They trade at 54 times expected 2007 profits per share, a premium to competitors HP and IBM, which both sell at about 17 times expected profits.