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Sun Microsystems Sees Rough Year, Shares Fall
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Sun Microsystems said on Friday it expects a tough fiscal year in the United States and warned that it would not turn a profit in the current quarter, driving shares down 9 percent on Friday.
The world's No. 4 maker of business computers said net profit for its fiscal fourth quarter, which ended June 30, fell to $88 million, or 11 cents per share, from $329 million, or 36 cents, a year earlier.
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Paul Sakuma / AP Sun Microsystems's headquarters in Santa Clara, California. |
Revenue fell 1.4 percent to $3.78 billion, as a 9 percent decline in U.S. sales hurt overall performance, according to a slide on Sun's website. The United States is Sun's biggest market, accounting for 38 percent of sales.
"We don't expect a lot in the U.S., even in the second half of the year," Sun Chief Executive Jonathan Schwartz said in an analyst call.
One problem he cited was U.S. financial services crisis.
"When you've got a $100 million customer that is not going to be growing its IT purchases but instead take it down 30 percent, that's a lot of customer acquisition to make up," Schwartz said.
The company said it does not expect to turn a profit in its current fiscal first quarter, which began July 1.
Sun's shares [JAVA
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The company expects revenue to keep declining year-on-year until at least the second half of 2009, and the full year will see modest low single-digit growth in revenue.
"There's no question the challenging U.S. macro environment has hindered our ability to grow the top line and we've got a greater share of our business in the U.S. than many of our peers," Schwartz said.
He said customers held off on making large purchases of its high-priced, high-margin SPARC computers in the United States, reflecting what he described as "economic anxiety" rather than competitive pressures.
Sun's rivals include International Business Machines [IBM
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Sun reported profit excluding items of 35 cents per share for the June quarter, at the high end of preliminary estimates it released on July 15.
At the time, the Santa Clara, California company said it expected fourth-quarter profit excluding items of 25 cents to 35 cents and revenue from $3.73 billion to $3.8 billion.
It said on Friday that revenue rose 4 percent in Europe, the Middle East and Africa, comprising 37 percent of sales.
Revenue was flat in the Asia Pacific, accounting for 17 percent of sales. In the Americas outside of the United States, revenue climbed 19 percent, accounting for 8 percent of sales.
The company also said its board authorized an additional repurchase of up to $1 billion of outstanding common stock.
Data is a real-time snapshot *Data is delayed at least 15 minutes
