Sun's turnover drops 11 percent

Sun Microsystems reported an 11 percent drop in turnover for the December quarter but managed to beat the modest expectations of financial analysts.

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Sun Microsystems reported an 11 percent drop in turnover for the December quarter but managed to beat the modest expectations of financial analysts.

Revenue for the quarter, the second of Sun's financial year, was US$3.22 billion, down from $3.62 billion in the same quarter a year earlier, Sun announced Tuesday. That was slightly ahead of the consensus analyst estimate of $3.16 billion, according to Thomson Reuters.

The net loss for the quarter was $209 million, or $0.28 per share, which compares to a net profit of $260 million, or $0.31 per share, for its second quarter of 2008. The loss per share includes $222 million in restructuring charges, related mostly to the mass workforce reductions that Sun announced in November.

Excluding those and other charges, Sun would have reported a profit for the quarter of $114 million, or $0.15 per share, the company said. Analysts had forecast a loss before charges of $0.10 per share, so the profit was an unexpected surprise.

Sun has been battling to grow its revenue for several quarters as customers cut back spending on its high-end Sparc servers in favour of industry-standard x86-type machines. Some of Sun's largest customers are big financial firms, so it has been hit particularly hard by the turmoil in the markets.

The company announced a plan in November to lay off up to 18 percent of its workforce, or 5,000 to 6,000 employees, as part of a restructuring designed to save it $700 million to $800 million per year. The move followed Sun's report of a $1.68 billion loss for the September quarter.

Sun increased its server unit shipments by 3 percent in the third quarter last year, according to the most recent figures from Gartner, but its revenue declined 14 percent, more than any of its big rivals, as customers cut back on larger Unix system purchases.