Sun Microsystems Inc. on Thursday reported a net loss of $760 million, or $0.23 per share, in the third quarter of its fiscal 2004 year, which ended March 28. The company also announced a reorganization of its hardware divisions, as well as the departure of two senior executives: Chief Marketing and Strategy Officer Mark Tolliver and Executive Vice President of Volume Systems Products Neil Knox.
Sun's revenue for the quarter was $2.65 billion, down 5 percent from the $2.79 billion it reported in the third quarter of 2003.
The company's $1.7 billion in product revenue for the quarter was nearly 10 percent less than the $1.9 billion it had reported for the same quarter in 2003. Storage revenue made up $346 million of that $1.7 billion total, down 6 percent from the year-earlier quarter.
Revenue for the company's services division was up from the year-earlier quarter, however. The company reported services revenue of $940 million for the third quarter of 2004, up from $893 million in the same quarter of 2003.
Another bright spot was Sun's Java Enterprise System server software, which realized an 88 percent jump in subscribers, according to Scott McNealy, Sun's chairman and chief executive officer, who spoke on a conference call Thursday. Sun had 93,000 subscribers to the $100 per-employee, per-year licensing plan in the second quarter of 2004. That number climbed to 175,000 subscribers in the most recent quarter, McNealy said.
The company also announced its first major reorganization since Jonathan Schwartz was appointed chief operating officer and president on April 2.
Effective immediately, the company's microprocessor and UltraSparc-based systems groups will be combined into a new Throughput Systems organization, which will be led by David Yen, who formerly headed up the company's processor division.
A new Network Systems division, headed on an interim basis by the former chief technology officer of Sun's software group, John Fowler, will be responsible for the company's systems based on x86 processors from Intel Corp. and Advanced Micro Devices Inc.
Sun is conducting "internal and external searches" for a permanent head of this division, a company spokeswoman said.
Anil Gadre, Sun's former vice president of software marketing, will replace Tolliver as the company's chief marketing and strategy officer, Sun said, and Brian Sutphin will now serve as vice president of corporate development.
Both executives, as well as Yen and Fowler, will report to Schwartz, who now oversees an executive team that also includes the heads of Sun's storage, software, services and sales divisions.
Tolliver and Knox left the company to "pursue other interests," Sun said in a statement.
McNealy downplayed the effect of the management changes. "The management change of putting Jonathan (Schwartz) in as COO is not entirely disruptive," he said during the Thursday call. "Very, very few people have a new boss. That's what really drives disruption."