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Sun Shines With Q4 Profit

Sun Microsystems Inc. (Nasdaq: SUNW) took a step back towards profitability yesterday when it announced its fourth-quarter results, with revenues up to $3.11 billion, an increase of 4.3 percent on the same quarter last year. Net income was $795 million, or 24 cents a share, compared with a net loss of $1.039 billion, or 32 cents for the same period last year.

The hardware firms performance was driven by growth in services and server sales. For the first time, Sun registered over $1 billion in services revenue for the quarter, and server unit sales grew 18 percent sequentially and 46 percent year-over-year.

Sun executives on the company’s earnings call said they will be targeting users of Hewlett-Packard Co. (NYSE: HPQ) kit within the data center, specifically firms using the HP-UX operating system.

And, true to form, Sun CEO Scott McNealy could not resist a swipe at the competition, singling out IBM Corp. (NYSE: IBM) and its recent launch of servers based on its Power5 processors for special criticism (see IBM Pushes Server Partitioning). “The Power5 has a very narrow sweet spot that doesn’t scale up very high and scale down very low,” he said.

McNealy claims that Sun’s long-awaited Solaris 10 operating system, which is set for launch later this year, will run across a range of processors from Advanced Micro Devices (NYSE: AMD) and Intel Corp. (Nasdaq: INTC) as well as Sparc chips.

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