Sun poised for profit despite slow spending

Sun Microsystems is sticking by its earlier forecast for a return to profitability in its fourth financial quarter ending 30...

Sun Microsystems is sticking by its earlier forecast for a return to profitability in its fourth financial quarter ending 30 June, although revenue still is expected to be down from a year ago because of continued weakness in IT spending.

Analysts expect the server and software maker to post revenue around $3.33bn (£2.29bn), down sharply from last year's $4.1bn (£2.8bn), but up from the $3.1bn (£2.1bn) reported for the previous quarter.

Sun has been hit relatively hard in the past year by the worldwide slowdown in corporate IT spending. When it reported its third-quarter financial results in April, it said it would shed about 1,000 workers by the end of the year, adding to the 4,000 jobs that it said last November it would need to cut. Those were the first large-scale layoffs in Sun's history.

The company hopes that its latest operating system, Solaris 9 - which adds a directory server, an application server and other features intended to broaden the functionality of its software - will help attract new users.

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