Sun Posts Strong Q2 Results Before Charges

Computergram International, Jan 16, 1998

Sun Microsystems Inc has reported second-quarter numbers that, before acquisition-related charges, saw a 25% increase to the bottom line. Net of the $110.1m charge, net income would have come in at $223.2m, or $0.57 per share, when the First Call consensus was looking for $0.54. Reported net income was down 16.2% at $149.4m, or $0.38 per share, on revenue that rose 17.7% to $2.45bn.

Sun says its Unix business was strong in the quarter, prompting chief executive Scott McNealy to remark "Rumors are that Unix is dying. If this is dying it sure feels good." The company attributes its record revenue to its continued focus and investment in its SPARC, Solaris and Java platforms. Sun also said it would be spending about $1bn on the development of new products and services, but gave no time frame for the spending. Charges in the quarter stemmed from the acquisitions of Encore Computer Corp's storage business and Chorus Systems SA. Six-month net income, which was hit by a combined $162.3m in charges, fell 14.5% to $257.9m on revenue up 15.4% at $4.55bn. Earnings per share for the six-month period fell 15.6% to $0.65.