Sun shares fall sharply on quarterly results
Shares slip as much as 14 percent in morning trading, after the company posts declining quarterly results amid a slowing U.S. economy.
Update at 7:55 a.m. PDT: Stock's decline has been updated.
Sun Microsystems posted a fiscal fourth-quarter decline in revenue and earnings early Friday, amid what it described as slowing U.S. growth.
Sun shares fell as far as 14 percent to $9.10 in morning trading, despite the company's announcement that it will expand its stock buyback program by $1 billion and the fact that it beat Wall Street's revised expectations.
During the quarter that ended June 30, Sun generated revenue of $3.78 billion, down 1.4 percent from a year ago. Sun's quarter met Wall Street's, according to a survey of analyst estimates by Thomson Financial.
Net income fell to $88 million, or 11 cents a share, in the quarter, down substantially from $329 million, or 36 cents a share in the same period last year.
Excluding charges, Sun posted net income of $275 million, or 35 cents a share, for the quarter. Wall Street had expected Sun to earn 25 cents a share, according to Thomson Financial.
During the full year, Sun's revenue increased to $13.88 billion, up a slight 0.1 percent, while its net income after charges improved to $1.1 billion from approximately $1 billion in the prior year.
"Despite this progress and strong growth in international geographies, slowing performance in the U.S. impacted top line revenue growth. Looking forward, we remain confident in open source innovation as the accelerant to our growth strategy through increased adoption of our open source offerings," CEO Jonathan Schwartz said in a statement.
With its shares trading near its 52-week low, Sun announced it will expand its stock buyback program by $1 billion, as it nears the end of the $3 billion share repurchase program it announced last year.