Sun Micro 2nd-quarter profit doubles

Source:Reuters.com Author:Philipp Gollner Date:03/25/14 Click:

SAN FRANCISCO (Reuters) - Sun Microsystems Inc (JAVA.O), the world's fourth-largest server-computer maker, said on Thursday that quarterly profit doubled amid strong growth in emerging markets.

Net income rose to $260 million, or 31 cents per share, for Sun's fiscal 2008 second quarter ended December 30, from $133 million, or 15 cents per share, a year earlier. Revenue increased 1.4 percent to $3.62 billion from $3.57 billion.

The company said it had double-digit percentage growth in emerging markets including India, China, Latin America, Eastern Europe and the Middle East during the second quarter.

Revenue decreased 8 percent in the United States and the region accounted for a smaller slice of total sales, but Chief Executive Jonathan Schwartz repeated on a conference call with analysts that the company had not felt the effects of the U.S. economic slowdown.

"We saw strong demand in the second half of the quarter despite a slowing U.S. economy" Schwartz said.

The company's gross profit margin increased 3.5 percentage points to 48.5 percent.

Sun executives told analysts they expect a gross profit margin of 45 percent to 47 percent for the current fiscal year and revenue growth of at least 5 percent in the second half as Sun targets full-year revenue growth in the low to mid-single digit percentage range.

Sun recorded $32 million of restructuring charges in the period.

Sun said in a preliminary earnings report last week that it expected to report second-quarter earnings of $230 million to $265 million, or 28 cents per share to 32 cents per share. It said revenue was about $3.6 billion, an increase of about 1 percent over the year-earlier amount.

Its shares, down 18 percent this year through Wednesday, added 13 cents in extended trading following the earnings report after closing up 8.8 percent at $16.12 on Nasdaq.

Sun, based in Santa Clara, California, has been trying to make a comeback under Schwartz, cutting jobs, selling server computers with processors from Advanced Micro Devices Inc (AMD.N) and Intel Corp (INTC.O) in addition to its own chips and growing in software.

Last week, Sun said it would buy Swedish database-software maker MySQL AB for about $1 billion to drive growth in its software services business. Sun expects restructuring charges of as much as $50 million when the deal closes, probably in the third or fourth quarter.

Schwartz said in a statement on Thursday the second-quarter results "highlight the demand set to fuel growth in the back half of the fiscal year."

Second-quarter growth was helped by an agreement for Dell Inc (DELL.O), the world's second-largest personal-computer maker, to sell computers with Sun's Solaris operating system, Sun said.

(Editing by Jeffrey Benkoe/Andre Grenon)

Latest News
Recommend News
Popular News
Slide Show
ADVERTISEMENT
Related News
Hot News