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October 18, 1995

PROFITS SOAR AT SUN BUT TURNOVER IS UP A CONSERVATIVE 17%

By CBR Staff Writer

Even when the figures from Sun Microsystems Inc are very good to excellent, the company frequently comes in with disconcertingly low turnover growth, and the cheering over a 120% leap in fiscal first quarter profits is tempered by the observation that sales were up only 17% at $1,490m – at a time when the vastly larger and more diversified Hewlett-Packard Co is growing considerably faster – and that largely on the back of Unix servers. The results nevertheless exceeded Wall Street’s expectations. Sun’s chief executive Scott McNealy said growth came in nearly all areas. Everyone wants to know what’s the silver bullet. But momentum is continuing across the board, he told Reuter in an interview. There is no silver bullet. Sun said that continued expansion into telecommunications, financial services and manufacturing, coupled with its growing presence in the Internet market, helped drive revenues and profits to high levels – its servers still dominate the Internet market. The company says that at 44.2% of sales, the gross margin percentage was at the high end of recent historical ranges. It was 40.2% this time in 1994.

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