weekend commentary - California's modern day 'gold rush' may be tarnished ...
(snip)"Sun Microsystems 3Q loss stuns Wall Street
Friday May 2, 9:44 am ET
By Jordan Robertson, AP Technology Writer
Sun Microsystems 3Q loss stuns Wall Street on weakening US sales
SAN JOSE, Calif. (AP) -- Wall Street expected Sun Microsystems Inc.'s global sales base to help it weather the U.S. economic slowdown and turn a profit in the first three months of the year.
Instead, the Santa Clara-based server and software maker stunned investors Thursday by reporting a loss in its third quarter, caused in part by sagging sales to U.S. consumer-oriented companies that are putting off big-ticket spending for better times.(snip)
(snip)"The company also forecast flat revenues for the fourth quarter and revealed plans to jettison between 1,500 and 2,500 jobs as it tries to snap out of a sudden financial funk.
Sun said after the market closed Thursday that it lost $34 million, or 4 cents per share, in the three months ended March 30. That's down from a profit of $67 million, or 7 cents per share, during the year-ago period.
The results for the latest quarter include costs of 4 cents per share from Sun's $1 billion acquisition of open-source software company MySQL AB, a purchase that gives Sun a foothold in the rapidly expanding market for database software for Web-based companies.
Sun also took a $52 million tax hit in the third quarter, compared with a tax benefit of $3 million in the same quarter last year.
Analysts surveyed by Thomson Financial had expected Sun to earn 18 cents per share.
The stock shed $2.41, or 14.8 percent, after hours, concluding at $13.93 after the results' release following the close of regular trading. It had ended up 67 cents, or 4.3 percent, at $16.33 in the regular session.
Sun's sales of $3.27 billion also came in below analysts' expectations. Wall Street was predicting Sun would have $3.38 billion in sales, a miss of more than $100 million.
The guidance for flat fourth-quarter revenue disappointed Wall Street as well. Analysts were expecting Sun's sales for the period to grow 3 percent over last year.
Sun's chief executive, Jonathan Schwartz, said in an interview that some of the weakness during the third quarter flowed from small businesses in the U.S. clamping down on spending.
"Smaller companies that could make discretionary decisions about (information technology) spending made discretionary decisions -- they definitely tapped the brakes," Schwartz said.
Schwartz added that slower-than-expected sales to government agencies also dragged down the results."(snip)
Re: weekend commentary - California's modern day 'gold rush' may be tarnished ...
Ya know how we know that Sun is financially fucked?
Because they outsource like a mother fuck.
Any company that outsources automatically becomes shit.
I don't know if it is the outsourcing talent OR if it is management's inability to generate revenue vs simply chop costs - but nearly every company that has outsourced has turned into a quagmire.
Re: weekend commentary - California's modern day 'gold rush' may be tarnished ...
^^^ probably true. I can understand Sun's problem though, which probably applies to other California based high tech businesses. The state won a supreme court case which allows them to tax the WORLDWIDE income of a California based corporation as if that income was generated in California. On top of that, California's state and local budget deficits are prompting them to increase real estate taxes ... and is also prompting state and local gov'ts to cut spending (in this case on new IT hardware from Sun). And the indirect fallout from rising de-facto California business taxes and property taxes are also slamming other California businesses ... some of whom have responded by also deferring the purchase of new IT hardware from Sun.