Sun reported results for its fiscal first quarter which ended September 28, 2003. Revenues for the first quarter were $2.536 billion, a decline of 8 percent as compared with $2.747 billion for the first quarter of fiscal 2003. Total gross margin as a percent of revenues was 40.1 percent, a decrease of 1.1 percentage points as compared with the first quarter of fiscal 2003. Net loss for the first quarter of fiscal 2004 was $286 million or $0.09 per share compared with a net loss of $111 million or a net loss of $0.04 per share for the first quarter of fiscal 2003.

Steve McGowan, Sun's Chief Financial Officer and Executive Vice President, Corporate Resources, said, "Despite our challenges this quarter, we reached the highest level of services revenue ever for a fiscal first quarter and we made strong gains in the 1-2 way server market. We reduced SG&A expenses by $84 million year over year, and although cash flow from operations was a negative $49 million, we exited the quarter with a cash and marketable securities position of over $5.5 billion."

Commenting on major initiatives in the quarter, Scott McNealy, Chairman, President and CEO, said, "While we have work to do, we made progress on key initiatives that will drive revenue going forward. Our quarterly Network Computing launch, NC03Q3, delivered over 30 breakthrough innovations, including the Sun JavaTM Enterprise System which makes serious software simple at industry-beating price points. We continued to execute on our low-cost computing strategy as we saw an increase in demand for Sun x86 systems. We completed the acquisition of CenterRun, furthering our N1TM strategy to automate network computing, adding 60 new customers this quarter. And our systems value proposition continued to resonate with increasing storage attach rates. We are delivering innovation, choice and value like never before and continued execution of this strategy will pay-off in revenue generation over the long-run."

There is a PDF of slides available from the earnings report. It lists customers Sun is winning with including EPL, Inc., a financial services company that needed to consolidate multiple communications applications into one. They consolidated all electronic communications onto Oracle Collaboration Suite on the Sun platform. The FAA needed a low-cost, long-term solution to lower TCO and enhance security, scalability and availability. They are saving money with Sun FireTM V210 servers and Sun RayTM appliances. The media and entertainment company Lodgian needed a storage infrastructure that would provide high availability, scalability and performance. They chose the Sun StorEdgeTM 6320 system, the Sun StorEdgeTM L100 tape library and a Sun FireTM V480 server.

The slides in the presentation also highlight the new products Sun introduced at the SunNetworkSM Conference 2003 in San Francisco, including the JavaTM Enterprise System, eight Sun Reference Architectures and StarOfficeTM 7 software.

Sun continues to offer low-cost alternatives with the SolarisTM Operating System (Solaris OS) (X86 Platform Edition). N1TM software will help automate and simplify data centers. Other slides show net revenues geographically, for products and services, and server marketshare. For the slides, see:

http://www.sun.com/aboutsun/investor/earnings_releases/Q104_SLD.pdf [...read more...]

From the latest issue:

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