We can also see how SUNW is treated tomorrow for another perspective,,, looks like their server business did well,,,
SAN FRANCISCO, Jan 20 (Reuters) - Sun Microsystems Inc.
<SUNW.O>, a leading supplier of servers and software that run
Internet Web sites, reported record fiscal second quarter
earnings on Thursday, with stronger-than-expected revenues due
to strong demand across all its product lines and geographies.
Palo Alto, Calif.-based Sun said its net income rose to
$353 million from $273 million, excluding one-time
acquisition-related items, in the year-ago quarter.
Earnings per share were 21 cents, up 24 percent, excluding
one-time items in the year-ago quarter. The consensus on Wall
Street was for earnings of 20 cents a share, according to First
Call/Thomson Financial. Including acquisition-related charges,
Sun's earnings in last year's second quarter were $261 million,
or 16 cents a share.
Revenues surged past their previous guidance, up 27 percent
to $3.55 billion in the quarter ended Dec. 26 from $2.8 billion
last year. In the first quarter, Sun had forecast that revenue
growth would be slightly above 20 percent in the second
quarter, due to the level of its backlog of orders in the first
quarter.
Both the current and the year-ago results were restated to
include the acquisition of Forte Software, which Sun bought in
August for $540 million.
In after-hours trading, Sun shares dropped to 83-3/4 from
the close of 86-9/16 on Nasdaq, where the stock had gained
3-5/8 in regular trading before the earnings were released.
"They ramped expenses because they are in a mode where they
really want to gain market share," said Phil Rueppel, an
analyst with Deutsche Banc Alex. Brown. Rueppel said he
suspected the stock was down in after hours trading because
some investors had bought the stock ahead of earnings,
expecting they would be way above consensus.
"The only reason it would be down is if anyone really
ramped up the stock if they were expecting blowout EPS, along
with blowout revenues. Revenues were excellent and they were
able to invest in sales and R&D and still beat consensus EPS by
a penny."
Sun has made big inroads in the past year, marketing its
servers and software to many Internet companies, including
startups, with its "dot com" campaign. Sun's servers power many
heavily-trafficked Internet sites.
In the past three to five months, Sun has added over 260
new dot-com companies as customers, along with a number of
service providers and telco companies, in addition to Fortune
500 customers like financial institutions and insurance
companies.
"A lot of our revenue growth is from companies that are
reinventing themselves," said Ed Zander, Sun's president, on a
conference call with analysts.
Sun executives also said on the conference call that the
company is now looking at a revenue growth rate of about 25
percent for the second half of fiscal 2000, on par with the
first half of the year, and better than the prior year's
growth.
"About six months ago, we were talking about 20 percent as
a top line number," said Michael Lehman, Sun's chief financial
officer, in an interview. "This (quarter's revenue growth)
wasn't just a one-to-two quarter phenomenon."
The company also said it did not see any impact at all from
any slowdown in spending in the quarter, due to Y2K concerns.
Separately, Sun Micro announced a deal worth about $350
million with Enron Corp.'s <ENE.N> Internet communications unit
to accelerate the adoption of high-speed Internet services.
The companies said Sun had agreed to provide the computers
and data storage necessary for Enron to launch an ambitious
expansion plan to build out its Internet-based fiber and
satellite communications network.
The deal calls for Enron's Enron Broadband Services unit to
buy 18,000 Sun Netra computer servers that will be used to
aggressively build out the communications network of Enron to
2,000 locations worldwide. Sun spokeswoman Maria Villarino said
the deal was worth about $350 million in equipment for the
servers, storage and professional services. |
