Sun suffers $760m loss

Sun Microsystems has reported a net loss of $760m for its third quarter, which ended 28 March. Revenue for the quarter was...

Sun Microsystems has reported a net loss of $760m for its third quarter, which ended 28 March. Revenue for the quarter was $2.65bn, down 5% from the $2.79bn reported for the same quarter a year ago.

The company's $1.7bn in product revenue for the quarter was nearly 10% less than the $1.9bn it had reported for the same quarter in 2003. Storage revenue made up $346m of the $1.7bn total, down 6%.

Revenue for Sun's services division was $940m, up from $893m in the same quarter of 2003.

Another bright spot was Sun's Java Enterprise System server software, which realised an 88% jump in subscribers. Sun had 93,000 subscribers to the $100 per-employee, per-year licensing plan in the second quarter of 2004. That number climbed to 175,000 subscribers in the most recent quarter.

Sun also announced a reorganisation of its hardware divisions, as well as the departure of chief marketing and strategy officer Mark Tolliver and executive vice president of volume systems products Neil Knox. Both left the company to "pursue other interests", Sun said.

Effective immediately, the company's microprocessor and UltraSparc-based systems groups will be combined into a new Throughput Systems organisation.

A new Network Systems division, will be responsible for the company's systems based on x86 processors from Intel and Advanced Micro Devices.

Anil Gadre, Sun's former vice president of software marketing, will replace Tolliver as the company's chief marketing and strategy officer, and Brian Sutphin will now serve as vice president of corporate development.

One industry analyst said that the changes within Sun appeared to be significant and, when combined with the company's settlement with Microsoft early this month, were signs of a company in the midst of a major reinvention.

"This has occurred very rapidly, and is of a very large scope," said Illuminata principal analyst Jonathan Eunice. 

"To me, this and the Microsoft deal are the results of the 'we know we're going to have to do things differently around here' observation."

Sun will begin laying off approximately 3,300 employees during the next quarter.

Robert McMillan writes for IDG News Service

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