Sun Microsystems exceeds profit target

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Sun Microsystems , Inc. (NASDAQ: SUNW) reported results today for its fourth quarter and full fiscal year, which ended June 30, 2007, exceeding its operating margin target, improving gross margin and delivering another sequential quarter of profit. Revenues for the fourth quarter of fiscal 2007 were $3.835 billion. For the full fiscal year, the Company reported revenues of $13.873 billion, an increase of 6.2 percent over fiscal year 2006. Total gross margin as a percent of revenues for the fourth quarter was 47.2 percent, and gross margin for the full fiscal year was 45.2 percent, an increase of 2.1 percentage points over fiscal year 2006.

 

Operating margin for the fourth quarter was 8.5 percent. Net income for the fourth quarter of fiscal 2007 on a GAAP basis was $329 million, or $0.09 per share on a diluted basis. For the full fiscal year, net income was $473 million, or $0.13 per share, on a diluted basis, as compared with a net loss of $864 million, or ($0.25) per share, for fiscal 2006.

 

Cash generated from operations for the fourth quarter of fiscal 2007 was $564 million, and cash and marketable debt securities balance at the end of the quarter was approximately $5.9 billion.

 

"With a solid strategy and consistent execution, we delivered on our commitment to achieve at least 4 percent operating margin in the fourth quarter. This milestone marks significant progress toward our longer-term growth plan of at least 10 percent operating margin for the full fiscal year 2009," said Jonathan Schwartz, president and CEO of Sun Microsystems. "The Solaris 10 Operating System continues to fuel opportunity for us and our partners, allowing customers to leverage built-in virtualization to harvest more value from their datacenters, without the unnecessary expense of separate software licenses."

 

Sun has scheduled a conference call today to discuss its financial results for the fourth quarter fiscal year 2007 at 1:30 p.m. (PT), which is being broadcast live at www.sun.com/investors .

 

GAAP Net Income: GAAP net income for the fourth quarter of fiscal 2007 included: $48 million of stock-based compensation charges, $15 million of restructuring and related impairment of assets charges, $70 million of purchase price accounting adjustments and intangible asset amortization charges related to acquisitions in fiscal 2006, $1 million of gain on equity investments and a $5 million benefit of related tax effects. The net impact of these five items reduced earnings per share on a diluted basis by approximately $0.04.

Please also refer to Sun's periodic reports that are filed from time to time with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2006 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended October 1, 2006, December 31, 2006 and April 1, 2007. Sun assumes no obligation to, and does not currently intend to, update these forward-looking statements except as required by law.

To supplement Sun's consolidated financial statements presented in accordance with GAAP, Sun provides non-GAAP net income (loss) and non-GAAP net income (loss) per share data. The presentation of these non-GAAP financial measures should be considered in addition to Sun's GAAP results and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

Sun's management believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding certain charges, gains and tax effects that may not be indicative of Sun's core business operating results. Sun believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing Sun's performance. These non-GAAP financial measures also facilitate comparisons to Sun's historical performance and its competitors' operating results.

 

Sun includes these non-GAAP financial measures because management believes they are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making. Non-GAAP measures are reconciled to comparable GAAP measures in the table entitled "Non-GAAP Calculation of Net Income (Loss) Excluding Special Items" following the text of this press release. 

 

Sourced From: Vaishnavi Corporate Communications Pvt Ltd