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July 18, 1997updated 05 Sep 2016 12:43pm


By CBR Staff Writer

Sun Microsystems Inc CEO Scott McNealy says the company’s $8.59bn fiscal 1997 shows that it’s working. The network is the computer and everyone’s figured that out now. Sun’s fourth quarter earnings were up 94% at $237m compared with $122m in the same period last year, on revenue up 26% at $2.54bn compared with $2.01bn last time. Earnings per share were $0.61, slightly ahead of expectations. For the year, earnings were up 60% at $762m compared with $476m 1996 on revenue up 21% at $8.59bn over $7.09bn last time. Earnings were more than it had been forecast internally, revenue was a little ahead, the company said. Sun, which sets itself a target of improving earnings by around 15%, says that going forward it will place more emphasis on revenue growth. Strongest growth was in North America. Europe was mixed, with the UK strongest market in the region, while France was affected by macro economic issues. Rest of the world business was strong, apart from Japan, where growth was limited. Gross margin was just over 50% for the third quarter in a row, although the company expects that will decline as competition increases. It says revenue from its server business is strong, having shipped around 70 of its high-end StarFire servers this quarter, expecting to ship 100 in the first quarter. It’s spending between $300m and $350m in its financial 1998 on real estate, building new premises in Boston, Denver and the Bay area. It’ll spend $1bn on R&D in the coming year. It said it’s now signed a definitive agreement to buy Encore Computer Corp’s storage business for $185m.

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