17 January 2003 Sun Microsystems has reported its biggest ever quarterly loss after writing off $2.13 billion (€1.99bn) in acquisition-related charges and $357 million (€335.1m) in additional restructuring costs.
The announcement was made as Sun unveiled its second quarter figures for the three months to the end of December.
Revenues weighed in at $2.92 billion (€2.74bn), down 6% from the $3.1 billion (€2.9bn) posted in the same period in 2001. However, revenues were up marginally compared to the first quarter, said CEO Scott McNealy.
Although the company’s net loss totalled $2.28 billion (€2.14bn) as a result of the write-offs, restructuring and other sundry charges, the company reported a small profit of $10 million (€9.4m), excluding these one-off charges.
Chief financial officer Steve McGowan stressed that the company remained in solid financial health. “Overall, our balance sheet is very strong with more than $5 billion in cash and marketable securities and net equity of over $7 billion,” he said.
Sun spent several billion dollars acquiring a wide variety of companies in the late-1990s as it tried to build a comprehensive software arm, as well as acquiring hardware vendors such as Cobalt, which made email server appliances based on open source software.
Financial details of most of the acquisitions were never disclosed, but it is clear that many of them were ultimately failures.
For example, the $73.5 million (€69m) purchase of office applications suite maker Star Division has yet to pay for itself and the company has recently ditched all the source code from NetDynamics, acquired in 1998, from its Sun ONE application server product line.