Sun Microsystems Earnings Rise 85 Percent
By Duncan Martell
SAN FRANCISCO (Reuters) - Sun Microsystems (NasdaqNM:SUNW - news) Inc., the biggest maker of computers that serve up Web pages, on Wednesday said fiscal first-quarter share earnings rose 88 percent as sales soared 60 percent.
The earnings release was briefly and mistakenly posted on Sun's Web site and then quickly pulled down. But before that happened, Reuters and other news agencies were able to see that Sun said its net income rose 85 percent, its earnings per share rose 88 percent, and sales rose 60 percent.
Palo Alto, Calif.-based Sun said in an official release following the online gaffe that net income rose 85 percent to $510 million, or 30 cents a share, from $276 million, or 16 cents a share, before acquisition-related charges. Sales rose to $5.05 billion from $3.15 billion.
The results easily topped consensus analyst forecasts for earnings-per-share of 26 cents, according to First Call/Thomson Financial.
In Sun's fourth quarter, sales rose 42 percent and are vastly outpacing those of rivals International Business Machines Corp. (NYSE:IBM - news) and Hewlett-Packard Co. (NYSE:HWP - news). It was also the first time in 10 years that Sun's first-quarter sales rose from the fourth quarter. Chief Financial Officer Mike Lehman forecast second-quarter sales will rise more than 40 percent.
``They're doing a fantastic job and doing much better than I ever thought they would do,'' said analyst David Wu at ABN Amro. ''As an old Sun analyst looking at it from afar, they kicked butt and took names.''
Order growth will be in the high 30 percent range in the second quarter while per-share earnings will be ``a bit higher than we were expecting a few months,'' Lehman said in an interview. He said on the call that full fiscal year sales will be in the mid-30 percent range.
On Tuesday, IBM reported third-quarter earnings that met expectations but sales fell short of expectations and IBM itself called the results disappointing. H-P is faring better in selling servers, the powerful computers that compete with Sun, but so far Sun seems almost unstoppable.
``It's clear that our growth rates are way above theirs,'' Lehman said. ``Demand was stronger than we had been expecting and we did a good job responding to it.''
Hardware and software sales in the quarter rose 63 percent as software services increased 47 percent, executives said. New orders climbed 54 percent.
Executives on a conference call with analysts and investors said they had begun an inquiry into how the earnings release ended up on its Web site prematurely.
Before word spread to traders and investors, Sun shares were trading at about $108. But once it did, the shares shot up $10 before trading was halted.
After Sun shares resumed trading, they ended up falling $1.19 to $110.19, but are up 42 percent this year. |
