Sun Preliminary Quarterly Figures Show a Drop
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Sun Microsystems on Monday reported preliminary results today for its first quarter of fiscal 2009, which ended September 28, 2008. Final figures are expected on October 30.
Sun expects to report revenues in the range of $2.950 to $3.050 billion, a drop from the $3.219 billion for the first quarter of fiscal 2008. Total gross margin is expected to be in the range of 39 to 41 percent.
The company anticipates a GAAP net loss per share of between $(0.25) to $(0.35) per share. That includes a restructuring charge of approximately $60 million as relates to a restructuring announced on August 1, 2008.
On a non-GAAP basis, Sun expects to report net loss per share in the range of $(0.02) to $(0.12) range. The non-GAAP expenses include amortization of acquisition-related intangibles, stock-based compensation, restructuring and related impairment of long-lived assets, net gain or loss on equity investments and the tax effect of these non-GAAP adjustments.
Sun (NASDAQ: JAVA) cited a combination of factors, including the current economic environment, Sun's operating results, and a sustained decline in Sun's market valuation as the reason that the fair value of one or more of its reporting units has been reduced below its carrying value. As such, Sun is conducting a goodwill impairment analysis to determine the required amount of the non-cash impairment charge, if any.
Sun chief Jonathan Schwartz tried to put the best spin possible on it in a brief statement. "Sun and its customers are seeing the impact of a slowing economy. We believe we are positioned to offer the kinds of products that can radically help customers reduce expenditures for their infrastructure from Open Storage to Solaris-based Chip Multi-Threading (CMT) systems to offering the most eco-efficient systems in the market," he said.
Dealing with RISC
Sun has been struggling to get back on track for several quarters. Its RISC-based servers are consistently to cheaper x86 servers, which the company also offers. Also, Sun's sales are more heavily dependent on the U.S. market, which is impaired due to the current economic climate. Sun has been expanding overseas, but it's not been enough to make up for losses on the home front.