Sun Micro Profit Nearly Doubles As Margins Climb

Sun Microsystems said its fiscal 2008 second-quarter earnings nearly doubled as services revenue increased and its gross margin improved.

For the quarter that ended Dec. 30, the server and software maker earned $260 million, or 31 cents per share, compared with $133 million, or 15 cents per share, in the year-ago quarter.

Paul Sakuma / AP Sun Microsystems' headquarters in Santa Clara, California.

Sun's revenue rose to $3.62 billion from $3.57 billion in the same quarter last year.

Analysts polled by Thomson financial expected quarterly earnings of 30 cents per share on $3.59 billion in revenue. Analysts typically exclude one-time items from their estimates.

Sun said services revenue rose to $1.37 billion from $1.31 billion, while products revenue declined a bit to $2.25 billion from $2.26 billion.

The company also said its total gross margin as a percentage of revenue came in at 48.5--up 3.5 percentage points when compared with the same quarter last year.

Sun shares rose 32 cents to $16.44 in after-hours trading, after finishing regular trading at $16.12.    

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