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Sun Posts Surprising 4Q Profit

SAN JOSE, Calif. (AP) -- Sun Microsystems Inc. posted a surprising fiscal fourth-quarter profit Tuesday as the struggling server and software maker continued to cut costs and reported gains from a lucrative settlement with Microsoft Corp.

For the three months ended June 30, Sun earned $795 million, or 24 cents per share, compared with a loss of $1.04 billion, or 32 cents per share, in the same period last year. Sales rose 4.3 percent to $3.11 billion from $2.98 billion last year.

The results include $1.6 billion of other income and $350 million in deferred other income related to Sun's April 2 settlement with Microsoft. Sun said it is seeking confirmation from federal regulators of its accounting related to the settlement.

In a statement, the company said a full breakdown of the results are "pending final resolution of these matters."

Analysts were expecting Sun to lose 4 cents per share on sales of $2.89 billion, according to a survey by Thomson First Call. During its third-quarter conference call, the company declined to provide guidance.

"Delivering growth and preliminary profits in Q4 is a great way to end the year," said Scott McNealy, Sun's chief executive. "We enter the new fiscal year with a strong balance sheet, the strongest product and services portfolio in our history, and the largest developer and partner communities we've ever had."

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