Shares of Sun Microsystems leapt 9% in late trading Monday on news that CEO Scott McNealy will step down after 22 years at the helm.
President and COO Jonathan Schwartz will take over as CEO, effective immediately, while McNealy will remain chairman and a full-time Sun employee.
The company has long been under pressure from Wall Street to cut costs and return to profitability, and traders’ reaction to the news suggests that they think Schwartz will be more likely to do so than McNealy.
Sun’s fiscal third quarter results, also reported after the close on Monday, showed a 21% increase in sales to $3.18 billion, but that was below $3.21 billion estimates. The company’s loss of $217 million, or 6 cents a share, was in line with forecasts.
“We’re growing again,” McNealy said in a statement. “Products are winning awards. The Solaris 10 Operating System is a runaway success. The next step is consistent profitability.”
Company officials said on a conference call that they will begin looking at areas for potential cost savings and will have more details to report in July.
Stocks traded lower Monday ahead of a key earnings report from Microsoft on Thursday and first-quarter GDP on Friday.
The Nasdaq fell 9 to 2333, the S&P 500 was down 3 to 1308, and the Dow gave back 11 to 11,336. Volume declined to 2.13 billion shares on the NYSE, and 2.05 billion on the Nasdaq. Decliners led 19-12 on the NYSE, and 19-10 on the Nasdaq. Downside volume was 66% on the NYSE, and 64% on the Nasdaq. New highs-new lows were 135-100 on the NYSE, and 161-48 on the Nasdaq.
Rambus jumped 15% after being awarded damages in its long-running patent case against Hynix.
TD Ameritrade and Silicon Labs
fell on their results.
Amazon and Lucent
lost ground ahead of their earnings reports on Tuesday.