Network Computing is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Storage Slows Down Sun

Sun Microsystems Inc. (Nasdaq: SUNW), buoyed by strong server sales and growing demand for its Solaris 10 operating system, posted a solid set of second quarter results today, although the vendor is still wrestling with its StorageTek acquisition. (See Sun Returns to Profitability and Sun to Acquire StorageTek for $4.1B.)

The vendor, after a turbulent few years characterized by layoffs and management reshuffling, finally returned to profitability today. Sun's revenues were up 7 percent year-over-year to $3.57 billion, just above analysts' estimates of $3.52 billion.

On a GAAP basis, Sun's earnings per share were 3 cents on net income of $126 million, compared to a net loss of 7 cents and $223 million in the same period last year. Analysts had estimated earnings of 1 cent.

Sun's storage revenues were something of a blot on the vendor's financials, and were down 7 percent year over year to $626 million. Speaking on a conference call earlier today Mike Lehman, the Sun CFO, said StorageTek's business in the corresponding year-ago quarter had been particularly strong, and admitted that the firms had experienced integration issues. "Most of the impact was in the U.S.," he said.

Combining some of StorageTek's legacy front-end systems with Sun's products posed problems in the quarter, according to the exec, trying to sound confident that this has now been resolved. "That's now behind us and we should be able to operate much more efficiently this quarter," he said.

  • 1