January 24, 2006

Sun reports another quarter in the red

Increased demand for company's x64 Sun Fire servers not enough to offset acquisition, stock-compensation, and resturcturing charges

A turn-around continues to elude troubled server vendor Sun Microsystems. On Tuesday the Santa Clara, California, server vendor posted a US$223 million loss for its most recent fiscal quarter, despite showing a 17 percent jump in revenue for the period.

Total revenue for the company's second quarter of fiscal 2006 came to $3.34 billion, up from $2.84 billion during the year-ago quarter. Sun attributed the jump in revenue, in part, to increased demand for its x64 Sun Fire servers, which use Advanced Micro Devices Inc.'s Opteron processors.

The once high-flying company has rarely posted a profit over the past five years and this recent quarter was no exception.

The $223 million loss amounted to $.07 per share, and it included $145 million in charges relating to the company's recent acquisitions, as well as $55 million in stock compensation charges and $10 million in restructuring charges. The loss also includes a $14 million of a gain on equity investments and a $3 million tax benefit.

Sun's Q2 ended on Dec. 25.

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