Sun revenues drop 8 per cent

Sun revenues drop 8 per cent

Sun Microsystems has seen its first-quarter fiscal 2004 revenues decline 8 per cent to $US2.5 billion.

Revenues dropped from the $2.7 billion reported in its year-ago quarter. The company posted a net loss of $286 million.

The company experienced growth in its storage and services divisions. The services division booked $900 million in sales for the quarter, the highest ever first-quarter earnings for the services group, according to Steve McGowan, Sun's chief financial officer and executive vice-president.

Single- and dual-processor servers represented the fastest growing part of Sun's server product line, said Scott McNealy, Sun's chief executive officer. "We see the low-end being kind of the hot new market right now," he said.

A rebound for Sun's higher-end servers seems farther off, according to McNealy. "I think the high end will come back in the next couple of years when we've got the next generation of Solaris," he said. "We think server consolidation will drive some of the bigger machines, down the road. But that ain't going to happen for a while."

Sun's product revenue was $1.6 billion for the quarter, a decline of 13 per cent from the year-ago period, McGowan said.

The company was unable to ship a number of its servers, including the Sun Fire V210 and V240, for the first month of the quarter. "In the month of July, most of our server product line was on stop ship."

As a consequence of this stoppage, Sun shipped products representing 60 per cent of its revenue in the last four weeks of the quarter, McGowan said.

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