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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Crazy Canuck who wrote (18146)	7/23/1999 8:23:00 AM
From: John Carragher	Respond to of 64865

July 23, 1999 Sun Microsystems Rides Sales To 45% Gain in Net Income By DAVID P. HAMILTON Staff Reporter of THE WALL STREET JOURNAL Sun Microsystems Inc. beat Wall Street's profit expectations in its fiscal fourth quarter on another impressive surge in revenue, as the computer giant continues to ride a groundswell of Internet-related demand for its powerful server computers. Sun said its net income for the quarter ended June 30 rose 45% to $395.2 million, or 48 cents a diluted share. In the year-earlier period, Sun reported net income of $273 million, or 35 cents a share, a figure that included a $15 million acquisition-related charge. Analysts surveyed by First Call/Thompson Financial had expected Sun to report earnings of 46 cents a share. The results got analysts' attention. "Sun is very impressive with that kind of revenue growth," said Donald Young, an analyst with PaineWebber. Revenue rose 22% to $3.51 billion in the quarter, up from $2.88 billion in the year-earlier period. For its entire fiscal year, Sun broke the billion-dollar profit mark for the first time, recording net income of $1.03 billion on sales of $11.73 billion. The results for both the quarter and the full year underscore Sun's growing clout as a provider of both the hardware and enterprise software for Internet business and corporate data networks. While both Intel Corp. and Microsoft Corp. have struggled to extend their strengths in personal-computer microprocessors and operating-system software to the world of servers, Sun has roared ahead with systems based on its own chips and Unix operating system. "They're winning a lot of server business with Internet-service providers and e-commerce companies," said Steven Milunovich, an analyst with Merrill Lynch. "They're the leading arms supplier." "Call me an optimist, but I don't think anyone is going to find anything wrong with this quarter," said Michael Lehman, Sun's chief financial offer. Among other things, Mr. Lehman pointed out that Sun's orders grew a larger-than-expected 20% in the quarter compared with the year-earlier period, and added that the computer maker's order backlog rose more than $100 million against the fiscal third period to $825.1 million despite efforts to reduce it. "We've had a hell of a year -- we really knocked the cover off the ball," Sun President Ed Zander said in an interview. Despite earlier fears that the year-2000 bug might slow Sun's sales in the second half of the year, Mr. Zander played down those concerns, noting that he "can't help feeling more optimistic" compared with earlier in the year. "Our customers are still investing" in high-performance servers as they build new e-commerce networks and open up their Internet data systems to the Internet, Mr. Zander said. Mr. Zander admitted that Sun still faces some significant challenges in the coming year, particularly from Microsoft's ability to make strategic investments with its giant cash hoard to promote the use of its Windows technology in network computing. Sun will also have to pull off an important product transition in the first half of 2000, as it moves to a new line of servers and workstations based on its new UltraSparc-III microprocessor. Sun released its earnings after markets closed. In regular trading on the Nasdaq Stock Market Thursday, Sun fell 5%, or $3.50, to $67.1875. Shares rebounded in after-hours trading to $69, according to Instinet Inc.