Sun's revenue drops 20% ahead of Oracle buy

Quarterly loss to March exceeds last year's

Sun Microsystems has reported a sharp drop in revenue for its third (January to March) fiscal quarter.

Reports that Sun was up for sale surfaced in mid-March and analysts had speculated that the rumours would disrupt the company's efforts to close deals at the end of the quarter, which finished on March 29. The initial suitor was reportedly IBM, but in the end it was Oracle that said it had snapped up Sun two weeks ago, for US$7.4 billion.

Sun's revenue for the quarter was US$2.61 billion (NZ$4.6 billion), it announced yesterday, down 20% from a year earlier and below the US$2.86 billion that financial analysts had been expecting, according to Thomson Reuters.

Its net loss was $201 million, or $0.27 per share, wider than last year's loss of $34 million. This year's figure included a restructuring charge of US$46 million, related mostly to the 5,000 to 6,000 layoffs Sun announced in November.

Sun executives made no comment on the quarter in the company's press release and said Sun would not be holding a conference call to discuss the results, presumably because of the pending acquisition of Sun by Oracle.

The company's financial performance has been uneven for the past several years, and lately it has struggled to increase sales or turn a profit. It has now posted losses for four of the past five quarters and its revenue has declined each time.

Sun counts several financial services companies among its largest customers and thus was hit earlier than most by the current recession.

Oracle says it will act quickly to make Sun's businesses profitable, which analysts say could mean cutting as many as 10,000 jobs.

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