Sun Microsystems' losses less than expected

Jan 28, 2009, 3:54 GMT

   Santa Clara, California - US server and software maker Sun Microsystems Inc posted losses of 209 million dollars for the foruth quarter, dragged down by restructuring costs, but fared better than analysts' expectations.

   At the same time last year the company reported a net profit of 260 million dollars. Sales suffered from the impact of the global economic crisis, dropping 11 per cent to 3.2 billion dollars, the Santa Clara, California-based company said Tuesday.

   Nonetheless, Sun's results beat analyst's expectations, as they were weighted down by costs of 222 million dollars for restructuring and payments to compensate laid-off workers, without those costs, Sun posted profits of 114 million dollars.

   Sun, the world's fourth-largest server maker after IBM, Hewlett-Packard and Dell, announced plans in November to sack 6,000 of its 33,000-strong workforce over the next year, a move expected to save between 700 and 800 million dollars.

   Shares jumped by 5.6 per cent to about 4 dollars in extended trading, but Sun's shares lost 75 per cent of their value in the past year.

   Sun's high-performance servers are used in the computer systems of large corporations, often in the financial sector, which was particularly hard-hit by the global credit crisis.

   Like its competitors, Sun is moving towards providing services and software to reduce dependence on the hardware business and provide more stable earnings.

   Software earnings rose by 21 per cent in the last quarter, a ray of light to Sun head Jonathan Schwartz.