Sun reports its sales took a big hit in last quarter

Sun Microsystems Inc. last week reported another sharp drop in revenue for its fiscal third quarter, during which the company battled uncertainty about its future along with the global recession.

Reports that Sun was discussing an acquisition with IBM surfaced in mid-March, and the vendor eventually agreed to sell itself to Oracle Corp. two weeks ago. Analysts said the rumors could disrupt Sun's efforts to close deals late in the quarter that ended March 29, and that appears to have happened.

Sun said its Q3 revenue was $2.61 billion, down 20% year-to-year, resulting in a $201 million net loss. Sales of its x86 servers, which had been a growth area, declined for the first time during the quarter. Total server shipments were off by 26% from last year's third quarter, according to Sun.

“There were few product categories that had any success this past quarter,” said Gartner Inc. analyst George Weiss. “There will be a lot on Oracle's agenda to at least try to reverse the direction in some of them.”

Sun has now posted losses in four of the past five quarters, and its revenue has declined in each of them. The company didn't hold a conference call on the third-quarter results, and its executives made no comments in the earnings report, presumably because of Oracle's pending acquisition.

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