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Sun tops Street's estimates

The firm reports slightly better-than-expected first-quarter profits, besting analysts' predictions by a penny.

Sun Microsystems reported slightly better-than-expected first-quarter profits, besting analysts' predictions by a penny.

Sun posted net income of $113.9 million or 29 cents per share, compared to profits of $108.4 or 27 cents per share for the like quarter a year ago. Excluding charges related to Sun's acquisition of NetDynamics, the company reported income of $197.9 million, or 50 cents per share, compared to income of $163.2 million or 41 cents per share--excluding extraordinary items--for the same period a year ago.

Wall Street was expecting the network computing giant to post profits of 49 cents per share for the quarter ended September 27, according to First Call.

Quarterly revenue rose to $2.5 billion, up from $2.1 billion for the like quarter a year ago.

"We had a terrific first quarter; our team really delivered," Sun chief executive Scott McNealy said in a statement.

In July, Sun bought NetDynamics, an application server software company, to boost its position in the enterprise software market. The company took a charge of $80 million on the deal and incurred a one-time increase of $30.4 million to its income tax provision.

"Sun's unrelenting focus and investments in enterprise network computing as well as technologies which enable the networked consumer are paying off big time," McNealy said.

Sun's main business is in servers and workstations for corporate networks. Many studies and analysts suggest high-end computers will continue to be a growth business based on the expansion of electronic commerce and corporate intranets.

Sun is also the developer of the Java programming language, which was designed to operate independent of any specific computing platform. The company's trademark of "The Network is the Computer" seemingly underscores its focus on network computing applications for big business.

Microsoft's Windows NT is Sun's chief competitor in the corporate computing environment.

Sun's stock closed more than 4 percent higher today at 48.8125 ahead of the news. The stock has traded as high as 53.3125 and as low as 30.375 in the past 52 weeks.