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Sun
Microsystems Reports First Quarter Results
Sun Microsystems, Inc. reported results today for its fiscal first
quarter which ended September 29, 2002.
Revenues for the first quarter of fiscal year 2003 were $2.7 billion,
down 4 percent as compared with $2.9 billion for the first quarter
of fiscal year 2002. GAAP net loss for the first quarter of fiscal
year 2003 was $111 million and net loss per share was $.04 as compared
with a net loss of $180 million and net loss per share of $.06 for
the first quarter of fiscal year 2002. For the first quarter of
fiscal year 2003, excluding a $31 million loss on equity investments,
a $24 million charge in connection with previous restructuring charges,
and a $22 million benefit for related tax effects, net loss was
$78 million and net loss per share was $.02.
Sun plans to reduce its workforce by approximately 11% from its
Q1 fiscal year 2003 beginning headcount level and consolidate and
eliminate excess space. As a result of these reductions, Sun expects
to record a charge of approximately $300 million in the second quarter
of fiscal year 2003.
Steve McGowan, Sun's Chief Financial Officer and Executive Vice
President of Corporate Resources said, "Sun has done an outstanding
job in maintaining fiscal discipline but it hasn't been enough to
counterbalance revenue shortfalls caused by the protracted economic
downturn. We believe the actions announced today are necessary to
return Sun to profitability and are in the best interest of our
long-term shareholders."
McGowan added, "Sun continued to remain cash flow positive
from operations this quarter. We paid off $200 million of debt and,
as a demonstration of faith in our company, we repurchased nearly
$500 million dollars of stock. We ended the quarter with a cash
and marketable securities position of over $5.2 billion and total
debt of $1.5 billion."
Sun's Chairman, President, and CEO Scott McNealy stated, "Despite
the challenging economic environment, we continue to broaden our
industry footprint and win customers in new markets such as life
sciences, healthcare and retail. At the same time, we are protecting
our investments in research and development, aggressively managing
cash balances, and gaining market share from competitors."
McNealy added, "We continue to deliver on our product roadmap
and R&D investments with the goal of lowering customer acquisition
costs and Total Cost of Ownership. In the last 90 days, we have
announced the secure Linux desktop client, Solaris[tm] on x86, the
Sun[tm] ONE software stack for Linux, and the Liberty-enabled Sun[tm]
ONE Platform for Network Identity. In addition, we announced further
advances in our UltraSPARC® processor-based technology and N1
architecture."
McNealy concluded, "We are doing our best to manage the company
responsibly for our long-term shareholders. Tough times require
tough decisions and everyone at Sun is dedicated to returning the
company to profitability as soon as possible."
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