Sun Microsystems Inc. on Monday posted a quarterly net loss due to merger- and other related charges as revenue climbed, boosted by the computer maker's acquisition of Storage Technology Corp.
Sun has struggled since the implosion of the dot-com and telecommunications investment bubbles to deliver consistent revenue growth and profitability. The company has introduced a line of servers called Galaxy that use Advanced Micro Devices Inc.'s Opteron processors, but sales have yet to boost Sun's revenue materially.
I don't think anyone was looking for a big upside on revenue and earnings, said Pacific Crest Securities analyst Brent Bracelin. What people are really looking for is some sort of evidence that we're at the beginning of a turnaround.
Sun said it had a net loss of $217 million, or 6 cents per share, for its fiscal third quarter ended March 26, compared with a year-ago net loss of $28 million, or 1 cent per share. Revenue rose 21 percent to $3.18 billion.
Analysts were expecting a net loss of 7 cents per share, on average, within a range of a net loss of 4 cents per share to 9 cents per share, according to Reuters Estimates. Revenue was pegged at $3.2 billion, within a range of $3.05 billion to $3.33 billion.
The charges amounted to 5 cents per share, and excluding them, Sun had a loss of 1 cents per share. That compares with a 3-cent-per share loss expected by analysts, excluding items.
We're growing again, said Sun Chief Executive Scott McNealy in a statement. The next step is consistent profitability.
Sun said that its traditional business -- the sale of its servers running the Solaris version of the Unix operating system and Sun's own microprocessors -- grew in the United States from a year ago, and in most of Asia, parts of Europe and nearly all parts of the Americas outside the United States.
We delivered the results we were anticipating, said Michael Lehman, the Sun chief financial officer who recently came out of retirement to resume his previous duties as CFO.
Shares of Sun have risen 18 percent so far this year, based on Friday's closing price, on investor optimism that Galaxy sales would take off. The Merrill Lynch 100 Technology Index, of which Sun is a constituent, has increased 10 percent in the same time period.
As is typical with Sun, the company did not give a revenue or per-share forecast for its current quarter.
In regular Nasdaq trade on Monday, Sun shares rose 5 cents, or 1 percent, to close at $4.98. In extended trade, the stock initially climbed a further 1.8 percent to $5.07, then settled back to $4.99.