Sun Microsystems says worst is over

8 March 2002 Sun Microsystems’ chief financial officer Michael Lehman has said that the company is on course to meets its sales and financial targets in the current quarter. He has also re-iterated his belief that Sun will return to profitability by the end of its financial year in June 2002.

Sun posted revenues of $3.1 billion (€3.54bn) in its second fiscal quarter and the company expects sales to be higher in the third quarter, which ends on 31 March 2002. This is in line with its forecast issued in January.

However, Sun did not say how much bigger revenues will be in the current period. The Palo Alto, California-based company gives a preview of its quarterly performance to investors and analysts half-way through each quarter.

Analysts expect third quarter revenue growth to be small at best on a sequential basis and for quarterly sales to be much lower than in the same period a year earlier. Then, revenues reached $4.09 billion (€4.67bn) and the company posted a profit of $136 million (€155.3m). That period has been followed by an uninterrupted series of losses.

Of the major server vendors, Sun was hardest hit by the dot-com crash which had been one of its key markets – it had once boasted that it put the “dot” in dot-com. As a result, it has lost a large chunk of market share to rivals Hewlett-Packard and IBM during the last year and a half.

However, Sun will be boosted if it can be seen to have turned the corner in the current quarter. The company hopes that the recent, somewhat belated, introduction of the new UltraSparc III microprocessor into its server range will help re-invigorate sales and its profit margins.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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