Revenue and Profits Down At Sun
The New York Times reports that Sun's revenues and profits have plunged, perhaps as a result of the uncertainty over the future of the company. After Oracle's acquisition of Sun, due to complete during the summer, Oracle may be wondering if they've made the right choice.
The first quarter of this year has seen a $201 million net loss from Sun, which works out at about 27cents a share. This really underlines the current economic situation and questions Sun's business model - this time last year the loss was at $34 million - not bad compared to the new figures. Sun's revenue is taking a beating too, down 20% to $2.6 billion.
It should be expected that sales would be down at the moment, as a lot of companies aren't willing to spend on computing infrastructure. Either way, analysts insist that the results are worse than expected.
The numbers were worse than analysts expected, which some of them see as a sign that uncertainty about Sun's future may have led customers to stop buying in the closing days of the quarter. "There is certainly potential for that," said Bill Kreher, an analyst at Edward Jones.
Sun is always going to be vulnerable from hardware, but there is a bright side to the news. On the software part of the business, billings from Java have risen 27% during the quarter, which equates to $73 million. MySQL database billings made $80 million in the same time. Does this indicate that Sun has (or had) a viable business model on the software side, particularly with Java?