Computer maker Sun Microsystems Inc. on Tuesday posted quarterly results that missed analyst expectations on higher costs even as revenue rose, helped by the acquisition of Storage Technology Corp.
Among the costs that rose in the quarter were expenses associated with sales of both its hardware and computer services, as well as higher selling, general and administrative costs and research and development costs.
Sun Microsystems said it had a net loss of $223 million, or 7 cents per share in its fiscal second quarter ended in December, compared with a year-ago net profit of $4 million, or nil per share. Revenue rose 17 percent to $3.34 billion from $2.84 billion.
Excluding items, Sun had a loss of 1 cent per share. On that basis, analysts had expected a profit of 1 cent per share, on average, within a range of a loss of 2 cents per share to a profit of 4 cents per share. Revenue was pegged at $3.50 billion.
Sun has struggled since the bust of the dot-com and telecommunications investment bubbles five years ago and amid the rising popularity of servers using the Linux and Windows operating systems. It has also lost market share to rivals including Dell Inc. and International Business Machines Corp .
Revenue from the sale of its computer servers, workstations, data storage and other hardware rose 14.5 percent to $2.11 billion. Revenue from its services arm rose 22.7 percent to $1.23 billion from $1.00 billion.
Scott McNealy, Sun's chief executive officer, said in a statement that the Santa Clara, California-based company's backlog is "the highest in years." Sun has been rolling out new products in the last year or so, and McNealy has said that Sun now has the strongest line-up of products in its history.
"I think most of what people will be looking for will be discussed on the conference call," said Mark Stahlman, analyst at Caris & Co, noting in particular a company forecast for expenses below the gross margin line and an update on the new products. "There's a lot going on in the product front."
The conference call for investors and analysts was taking place Tuesday afternoon following the company's earnings statement.
Sun's recent stock performance marks the fifth time the stock has appreciated about 30 percent or more in the last three years, Sanford Bernstein analyst Toni Sacconaghi wrote in a recent research note. In each of the previous four occasions, a retreat of 20 percent or more followed.
As is customary with Sun, the company did not issue a revenue or profit forecast for the current, third quarter.
