Computer maker Sun Microsystems Inc. on Thursday reported its largest net loss ever, taking more than $2 billion in acquisition-related charges, but squeezed out a small operating profit thanks to stronger pricing and lower component costs than expected.
Santa Clara, California-based Sun, which makes computers that manage networks, failed to reiterate a target set in November of turning a profit by the end of the company's fiscal year in June, saying the economy was too murky.
Chief Financial Officer Steve McGowan also said he would stop giving mid-quarter updates and declined to comment on clients' spending plans for the same reason
Investors also focused on a bigger question -- whether Sun's developing technology to easily manage networks could fend off incursions by PC technology makers Microsoft Corp. and Intel Corp., which are moving into the high-end computing space where Sun is strong.
"Not only are (Sun) pressured to report good results on a quarterly basis, but their long-term standing in the IT (information technology) market is being called into question," said Marty Shagrin, an analyst at Victory Capital, which has some Sun stock.
News source: Reuters - Sun Microsystems Posts $2 Billion Loss