Sun Microsystems reported quarterly earnings late Monday that met Wall Street estimates, but the company’s sales came up short of forecasts.
Net income was $89 million, or 3 cents a share, meeting estimates and reversing a year-ago loss of $56 million. Sales were up 1% from the year-ago quarter to $3.22 billion, but that was $50 million below estimates. Gross margins were up five percentage points to 48.5.
“We showed continued execution and operating discipline and delivered a very solid first quarter with continued revenue growth, profitability and gross margin expansion,” Sun CEO Jonathan Schwartz said in a statement.
Schwartz cited “particular strength in our high-end systems lineup, good growth in our subscription-based identity management software offerings, and even more adoption and momentum behind the award-winning open source Solaris 10 Operating System and our virtualization offerings. Growth remains our top priority for fiscal 2008 as we look to capitalize on our UltraSPARC T2 servers, delivering outstanding Solaris and Linux performance with extreme energy efficiency.”
After rising 2% during the day, Sun shares declined 2.8% in after-hours trading.
Monday’s trading session was once again dominated by steep losses in financial stocks like Citigroup, which fell 5% as it began a search for a new CEO and said it faces an additional $8-$11 billion in credit market losses. The Nasdaq, like its blue chip counterparts, ended the day half a percent lower.
IAC/InterActive rose 7.5% on plans to split its Internet empire into five publicly traded businesses, including its HSN home shopping network, Ticketmaster, Interval time-share business and LendingTree. About 30 Web-based properties will remain part of the core company.
Google shares hit a fresh all-time high after the company revealed its wireless plans.
EMC lost 4% on worries about loss of business and new competition after partner Dell plunked down $1.4 billion for EqualLogic.
Cisco edged 1.8% higher ahead of its earnings due out late Wednesday.
Mentor Graphics fell on a warning, while Multi-Fineline gained 21% on its results.
Time Warner was little changed on news that CEO Richard Parsons is leaving.
The Nasdaq lost 15 to 2795, the S&P fell 7 to 1502, and the Dow lost 51 to 13,543. Volume declined to 3.87 billion shares on the NYSE, and 2.16 billion on the Nasdaq. Decliners led by a 25-7 margin on the NYSE, and 20-9 on the Nasdaq. Downside volume was 76% on the NYSE, and 62% on the Nasdaq. New highs-new lows were 68-307 on the NYSE, and 95-325 on the Nasdaq.