Sun Microsystems Inc., the world's fourth-largest maker of server computers, yesterday reported net income of $329 million, or 9 cents a share, exceeding analysts' estimates, after it cut jobs and closed offices. The shares jumped in after-hours trading.
The fourth-quarter earnings compared with a loss of $301 million, or 9 cents, a year earlier, the Santa Clara, Calif., company said yesterday in a statement. Analysts surveyed by Bloomberg had estimated earnings of 5 cents. Sales rose 18 percent to $3.84 billion in the period ended June 30.
Chief executive officer Jonathan Schwartz, who pledged to return Sun to profitability after taking over the company last year, exceeded his goal of a 4 percent operating margin in the quarter.
Schwartz has cut 3,700 jobs, and is aiming for a 10 percent operating margin in fiscal 2009. The fiscal year just ended marks Sun's first annual profit since 2001.
"He overdelivered," said Tim Ghriskey, chief investment officer at New York-based Solaris Asset Management, who oversees more than $1 billion and doesn't own Sun shares. "It was a very good quarter for them and quite a surprise."
Shares of Sun rose 52 cents to $5.41 at one point in extended trading after the report was released. They had fallen 3 cents to close at $4.89 in regular Nasdaq Stock Market trading. The stock has dropped 9.8 percent this year and 1.8 percent since Schwartz became chief executive in April 2006, when he took over for cofounder Scott McNealy.
Sun's operating profit margin was 8.5 percent in the quarter. The margin represents income as a percentage of sales, excluding discontinued operations. The company had reported an operating loss of 8.8 percent in the year-earlier period.
Sun trails International Business Machines Corp., Hewlett-Packard Co., and Dell Inc. in sales of server computers, which manage corporate networks and Web sites.
Sun's server sales, which accounted for 48 percent of its revenue, rose 2.3 percent to $1.85 billion last quarter. Storage revenue fell 10 percent to $639 million.