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  1. Technology
July 16, 1998


By CBR Staff Writer

Sun Microsystems Inc reported fourth quarter net income up 15% at $273m, including one-time acquisition charges – it bought NetDynamics, Redcape and Dakota in the period – over $237.17m last time, on revenue up 13% at $2.88bn over $2.54bn. For the year net income was up 3.7% at $763m including charges over $735.7m last time on revenue up 14% at $9.79bn compared with $8.59bn. Earnings per share were $0.73, a couple of pennies ahead of Wall Street estimates. While US revenue was up 28% and Europe up 26%, revenue from Japan declined 12%, which cost the company several hundred million dollars, according to Sun CEO Scott McNealy. The company doesn’t expect Asia/Pacific revenue to change much in the near future and expects the next six months of revenue growth to look much like the last. The company claims it shipped a record number of units in the quarter due to strong demand for the Ultra 5 and 10 workstations, and price cuts on some of the server lines. Interestingly there was little mention of JavaStation. Sun president Ed Zander claims that once all the market research numbers are in they’ll show Sun is now number one in network and enterprise servers. It says it shipped 500 of its high-end Starfire servers in the year – and the most ever in the quarter, though it wouldn’t say how many – and 600Tb of disk in six months. It claims Starfire capacity production issues, including chip supplies, have now gone away unless we get some really unexpected demand. Sun says it will ship its next- generation UltraSparc III Cheetah systems by the end of next calendar year. It expects to begin seeding the market with systems in the second quarter. The full 64-bit Solaris Unix will ship by year-end – it says 32-bit applications are testing faster than on the current Solaris. It says it shipped 250,000 Sparc chips in the quarter. It claims there’s still no enterprise challenge from Windows NT, and it reckons it has a three-year lead and at least 18 months ahead of Intel Corp system vendors. The JDK 1.2 Java work with the HotSpot compiler doesn’t look like it will hit the street until the fourth quarter of the year. On the competitive front it says Merced’s slippage helps it; that Compaq is pre-occupied with its DEC acquisition; while HP customers are confused about the future of its PA-RISC system and HP-UX Unix strategies.

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