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Sun stands by profitability plan

The server maker reiterates its earlier expectation that it will return to profitability in the current quarter. Also unchanged is the tough spending environment.

Server seller Sun Microsystems reiterated its earlier expectation that it would return to profitability in the current quarter, exiting Chief Financial Officer Mike Lehman said Thursday.

"At this point, there is no reason to change our guidance," Lehman said in a conference call with financial analysts midway through Sun's fiscal 2002 fourth quarter.

Sun is expected to report a profit of 1 cent per share for the quarter, which ends June 30, with sales of $3.33 billion, according to analysts surveyed by First Call.

In April, Sun said that it expected a small gain in revenue from the third to fourth quarter, slightly increasing gross margins, as well as expenses from operations. Sun stands by those predictions, Lehman said.

Also unchanged is the tough spending environment, Lehman said. In April, as with the present, "Our results were being hampered by heavily constrained information technology spending," he said.

Sun sell servers, expensive and powerful computers that perform tasks such as delivering e-mail or handling the switching that enables phone calls to go through. The company was pushed into the red by the collapse of Internet spending, the economic downturn and competition from IBM and HP, but has managed to stanch market share losses.

Sun cut about 3,900 employees in recent months. IBM also is laying off server staff.