Sun Microsystems Inc. (Nasdaq: SUNW) continued to gain at the expense of competitors on the way to posting fourth quarter earnings ahead of analyst forecasts.
In fiscal fourth quarter results released after market close Thursday, the server and workstation vendor reported net income of $395 million, or 48 cents a share. First Call's survey of 19 analysts predicted a per share profit of 46 cents for the quarter ended June 30.
Fourth quarter revenue increased 22 percent year-over-year, to $3.515 billion, about in line with what most analysts expected. Sun earned $288 million, or 37 cents a share in the year earlier period. The company boosted its share of the Unix server market, to 28 percent of total factory revenue for the industry, according to International Data Corp.
"Our team really delivered," Sun CEO Scott McNealy said. "Sun's success has come as a direct result of our relentless focus on network computing."
The company bulked up the balance sheet in the fourth quarter. Sun now has almost $2.6 billion in cash, more than double a year ago. Sun will use that war chest to build its organization, said Michael E. Lehman, vice-president of corporate resources and CFO. "Our continued investments in research and development, combined with further investments in our field sales, service and support organizations, should enable Sun to further capitalize on the market opportunities ahead of us," he said.
Sun executives have previously warned that the second half of fiscal 2000 could see a slowdown as companies cut back on technology spending and focus on guarding against possible Y2K computer problems.
Shares of Sun retreated 3 1/2 to 67 3/16 in Thursday's trading ahead of the earnings report. Of 22 analysts polled by Zack's Investment Research, nine recommend Sun as a "strong buy", nine maintain the equivlent of "moderate buy" ratings, and four rate the stock a "hold".>