Excluding a one-time charge from the acquisition of Maxstrat, the company had net income of $291.4 million for the quarter ending March 28, the company said in a statement. The company had revenues of $2.94 billion, a 24 percent increase over the same quarter a year ago.
The Palo Alto, California, company was expected to report profits of 35 cents a share, according to the consensus of analysts surveyed by First Call. The earnings per share figures reflect a two-for-one stock split April 8.
Though Sun stock dipped $2 to $60.5625 in trading today, the stock overall has been rising steadily since October, reaching an all-time high of $72.5 per share last week. Analysts attribute the performance to the company's successful strategy of supplying infrastructure for the Internet.
"They have certainly been doing well on servers in the key areas of the market that are the most rapidly growing"--in other words, the Internet, said Goldman Sachs analyst Laura Conigliaro. Sun computers are the hardware most often identified with the Internet, she said.
Analysts also expect Sun to benefit from its partnership with America Online, which beefs up the company's Web software presence and gives Sun a major new hardware customer.
Conigliaro had set a goal of 20 percent revenue growth but said the company may exceed that. "We are thinking they had a strong quarter and can do a little better than 20 percent revenue growth," she said.
In the third quarter a year ago, Sun had revenues of $2.4 billion. Last quarter, Sun had revenues of $2.8 billion.
Sun got its start making workstations that were popular with programmers and researchers, but the company then pushed into servers--the computers that make networking possible. Sun's machines are now vastly more powerful, but have stayed true to the company's Unix roots.
Though Sun doesn't approach IBM in the reach and comprehensiveness of the consulting services it sells, the company is no longer ridiculed, Conigliaro said. That's because Sun has genuinely improved some of its services, but also because it has expertise in some new areas such as e-commerce.
The company also has been emphasizing software: focusing on its Solaris operating system, server programs to handle tasks such as managing email or creating customized Web pages, and its "write once, run anywhere" Java technology.