Sun Microsystems jolted financial analysts by posting a $34 million net loss for its third business quarter, which ended March 30. Company revenues also declined by a half percentage point from a year ago to $3.27 billion, missing the company’s projections as well as expectations on Wall Street. The results were in stark contrast to the upbeat financial reports recently issued by industry bellwethers such as IBM and Google.
In particular, Sun’s U.S. revenues decreased 10 percent year over year, with sales declines in both the computer systems and storage segments of the company’s business.
“We saw a substantive change in U.S. sentiment, along with change in orders mix and closings, with purchase decisions postponed on the basis of macroeconomic uncertainty,” said Sun’s CEO Jonathan Schwartz. “I’m disappointed.”
Growth Overseas
With the U.S. traditionally representing about 40 percent of Sun’s business, the company found itself unable to use growth in the world’s remaining geographies to offset its U.S.-based sales problems. “Collectively, the slowing had the most pronounced impact on the higher end of our system-product sales from high-end tape libraries to enterprise servers,” Schwartz said.
The U.S. problems overshadowed the far better results the company achieved in other parts of the world. Sun delivered growth in 12 out of 16 selling geographies during the quarter, Schwartz noted, with double-digit performance in emerging markets within Europe, the Middle East and Africa; the Asia Pacific; and the Americas, excluding the U.S. market.
The company’s Niagara-based platforms also grew billings by an impressive 110 percent year over year. Moreover, sales at the company’s display storage business grew 6 percent. Even better, Sun saw outstanding growth in its blade server business, together with wins in high-performance computing.
“With the evolution of blades, you can get 48 blades in one rack and, at this…