The net loss amounted to 4 cents per share using generally accepted accounting principles, the same with the year-earlier period with a loss of US$133 million. Excluding a number of charges, the company's net loss was US$68 million, or 2 cents per share. That was deeper than the average 1-cent loss analysts expected, according to Thomson Financial.
Revenue increased 4 percent to US$2.73 billion for the quarter, which ended September 25, from US$2.63 billion a year ago. Of the revenue, US$226 million was from StorageTek and Seebeyond, Sun said. Analysts expected an average of US$2.89 billion.
Chief Executive Scott McNealy expressed optimism about the results and the affect of the company's acquisitions on its earnings. "Clearly the numbers are looking nice. We are turning cash into inorganic growth," he said.
Investors disagreed, sending Sun's stock down 15 cents, or 4 percent, in after-hours trading, from the market close price of US$3.85.
Sun long has resisted regulatory requirements to report stock options as an expense, but this quarter, the Santa Clara, California-based company had no choice. The move resulted in a US$50 million charge, the company said.
Sun is in the midst of a major transformation to try to restore its ailing financial fortunes. It's banking on the new "Galaxy" line of x86 servers, a revamp of the Solaris operating system to make it an open-source project and suited for x86 servers, a push to sell the Java Enterprise System server software, and a rejuvenation of the core UltraSparc server family.
However, it has many challenges ahead. Chief Financial Officer Steve McGowan announced plans to retire last week, the same day that shareholders voted against a "poison pill" provision that makes it difficult to acquire Sun.
The company had US$224 million in cash flow from operations for the quarter, with cash and marketable debt securities of US$4.53 billion.
