Sun Microsystems Inc is continuing to thrive, despite its complete unwillingness to compromise its anti-Microsoft principles. Second quarter revenues were up 14% over last year to $2.78bn, and income reached $261.1m, or $.64 a share, excluding $12m of charges connected with the acquisitions during the quarter of Beduin Communications Inc and i-Planet Inc, plus a $3.2m increase to its income tax provision. Without those charges, Sun says its income growth would have been 22% up from the previous year, reaching $272.3m. Gross margins were 51.6%. Nevertheless, chief financial officer Michael Lehman said he was pleased to have the quarter behind us. In October, Sun booted up its new order entry, manufacturing and distribution systems, which Lehman said made the quarter one of the most difficult we’ve ever had in terms of operational challenges. Sun actually encouraged its distribution partners to build up a backlog of orders in case things didn’t work out, so that it came into the quarter with $300m of backlog and $200m of bookings – so that revenue growth during the first half of the year was higher than in the second quarter, 16% compared with the same period the previous year. The new systems make Sun’s operations M&M free (that’s mainframe and Microsoft), and give Sun a platform base from which to further dot com ourselves said Lehman. Sun doesn’t break down the growth in individual product lines, but said its services business continued to grow very strongly, and mentioned low-end workstations, workgroup servers, high-end Starfire servers and storage as other highlights among a generally strong product portfolio. The company says it expects to see revenue growth accelerate during its fiscal second half. Sun also declared its plans for a stock split to be effective after April 8, and continues with its stock repurchasing plan.
