Sun Exceeds Profit Target

SANTA CLARA, Calif. -- Sun Microsystems, Inc. (Nasdaq: SUNW - News) reported results today for its fourth quarter and full fiscal year, which ended June 30, 2007, exceeding its operating margin target, improving gross margin and delivering another sequential quarter of profit. Revenues for the fourth quarter of fiscal 2007 were $3.835 billion. For the full fiscal year, the Company reported revenues of $13.873 billion, an increase of 6.2 percent over fiscal year 2006. Total gross margin as a percent of revenues for the fourth quarter was 47.2 percent, and gross margin for the full fiscal year was 45.2 percent, an increase of 2.1 percentage points over fiscal year 2006. Operating margin for the fourth quarter was 8.5 percent.

Net income for the fourth quarter of fiscal 2007 on a GAAP basis was $329 million, or $0.09 per share on a diluted basis. For the full fiscal year, net income was $473 million, or $0.13 per share, on a diluted basis, as compared with a net loss of $864 million, or ($0.25) per share, for fiscal 2006. Sun Microsystems Inc.