Sun Jumps, Amazon Slumps

Sun’s first earnings report under new CEO Jonathan Schwartz was a winner, but investors had quite the opposite reaction to Amazon’s quarterly results.

Sun shares climbed 1% in late trading after the company beat estimates on both the top and bottom line. Earnings — after removing restructuring and other charges — of 4 cents a share were 7 cents ahead of the loss analysts were expecting. Sales rose 20% sequentially to $3.83 billion, well ahead of $3.61 billion forecasts.

“We’re making excellent progress returning Sun to growth and profitability,” Schwartz said in a statement. “Revenue, bookings and backlog are all up substantially — indicating we’re gaining traction, market confidence and share.”

If there was a downside to the report, it’s that Sun’s September quarter guidance of a 20% sequential sales decline would place revenues just below $3.1 billion estimates.

Amazon shares tumbled 10% after the company’s earnings of 5 cents a share missed estimates by 2 cents, hurt by the loss of $20 million from Toys R Us. Sales rose 22% to $2.14 billion, edging $2.10 billion forecasts. The company raised sales guidance for the third quarter and full year, but lowered operating income guidance.

As usual with Amazon, margins and investments were big issues for investors.

“We’re investing in Amazon Prime and future technology initiatives,” CEO Jeff Bezos said in a statement. “Amazon Prime gets customers their products fast, and our investments in technology position us to innovate in seller platforms, web services, and digital. We’re looking forward to the coming decrease in our year-over-year growth rates in technology spending in the second half of 2006.”

Also after the close, Corning , Cymer and RF Micro fell on their results. And HP announced plans to buy Mercury Interactive .

Stocks rose during the day, buoyed by strong results from Texas Instruments , SanDisk , AT&T and Agere , as traders shook off weak results from 3M and UPS . Rising consumer confidence also helped.

Netflix , Level 3 , Zoran and Atheros fell on their results. Gateway lost 6% on news that it will be dropped from the S&P 500.

The Nasdaq rose 12 to 2073, the S&P 500 gained 8 to 1268, and the Dow rose 52 to 11,103. Volume rose to 2.63 billion shares on the NYSE, and 1.99 billion on the Nasdaq. Advancers led 22-10 on the NYSE, and 18-12 on the Nasdaq. Upside volume was 72% on the NYSE, and 65% on the Nasdaq. New highs-new lows were 103-55 on the NYSE, and 82-114 on the Nasdaq.

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