Sun’s bad quarter

I was interested to see Sun’s financial results after visiting the company earlier this year.

Not too good:

Revenues for the third quarter of fiscal 2008 were $3.266 billion, a decrease of 0.5 percent as compared with $3.283 billion for the third quarter of fiscal 2007 … Net loss for the third quarter of fiscal 2008 on a GAAP basis was $34 million, or ($0.04) per share, as compared with net income of $67 million, or $0.07 per share, for the third quarter of fiscal 2007.

When I visited we were told that rising income from developing nations would compensate for weakness in the USA, but apparently this is not the case. Although income from the likes of India and Brazil is rising, it is not enough to make up the difference. Another question: why is Sun under-performing relative to other companies such as IBM and Intel, both of which reported strong first quarters last month?

Sun is also set to cut 1,500 to 2,000 jobs, which suggests that the company does not expect demand to pick up soon.

The issue to me is whether Sun can make sense of its commitment to open source, or whether the proprietary guys are showing where the money really is. The MySQL purchase was great PR, but doubtful business sense.

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