Sun Microsystems Inc turned in a solid third quarter, beating the Street’s estimates by four cents, reporting earnings of $0.58 a share after an $0.04 charge for last month’s acquisition of Java house LongView Technologies LLC and an $0.11 gain on sales of $62.24m stock in Iona Technologies Ltd which went public last month. Sun reported net income up 56% at $223.51 on revenue up 15% at $2.11bn on $1.84bn last time. At the nine month mark, net income was up 48% at $525.24m on sales up 19.2% at $6.05bn. Gross margins were down a shade at 50.2%. Growth in US business once again lead the way – up 20.66% – with Europe up 15.1%. Sales in the rest of the world markets were up just 5.1%, let down by a weak Japanese market. Some examples from the regions includes sales in Mexico up 200%, Argentina 100%, Korea 60% and China and Taiwan 30% each. The company sold between 10 and 20 of its Ultra Enterprise 10000 ‘Starfire’ servers at an average of $1m at time in its third quarter, expects to shift 70 this quarter and 100 in the first quarter. Sun has 900 more employees now than at this time last year; 20% of its 20,379 staff are temps. It has got close to $1bn cash in the bank. Sun CEO Scott McNealy is still not completely happy with product execution of some parts of the business though – JavaOS perhaps? – and characterized the need to gear-up better for the industry’s looming ‘Coke versus Pepsi’ battle ‘between Java and CaptiveX on the client’ and ‘Solaris and Windows NT’ on the server. We want to taste better, said McNealy. Why not spend more on Java then? ‘Imagine what would happen to our stock if we’d only met consensus! said McNealy. He’s off to China and Japan to improve Sun’s message in the regions.
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