Economy wallops Sun net income
Sun Microsystems Inc. posted a $1.7-billion loss for its latest quarter as the maker of servers and business software wrote down the value of the company because of the slow economy and a huge decline in its stock price.
Even excluding the goodwill write-down, Sun’s results came in at the low end of its own forecast, which was lowered last week, and below analyst expectations.
“The economic downturn continued to weigh on our customers, especially those that contribute to our traditional high-end businesses,” said Chief Executive Jonathan Schwartz.
The financial services industry has been one of Sun’s big customers.
The Santa Clara, Calif.-based company lost $1.68 billion, or $2.24 a share, in its fiscal first quarter, which ended Sept. 28. In the same period last year, it earned $89 million, or 10 cents a share.
Excluding the $1.45-billion goodwill write-down and a $63-million restructuring charge, Sun lost 9 cents a share. Analysts surveyed by Thomson Reuters expected a loss of 8 cents a share. Sales fell 7.1% to $2.99 billion, coming in below the analyst forecast of $3.05 billion.
Sun shares rose 46 cents, or 9.5%, to $5.29. The shares rose to $5.27 in after-hours trading, when the earnings news was released.
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