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Sun Microsystems swings to profit
2007-01-23
Sun Microsystems Inc. on Tuesday posted a quarterly profit versus a year-ago loss as revenue rose 7 percent, fueled by higher sales of its computer servers. Sun (Nasdaq:SUNW) said it had a fiscal second-quarter net profit of $126 million, or 3 cents per share, compared with a net loss of $223.0 million, or 7 cents per share, a year ago. Revenue rose to $3.57 billion from $3.34 billion. Analysts expected Sun to report earnings of nil per share, on average, on revenue of $3.52 billion, according to Reuters Estimates. The company said in October it expected revenue would rise "in the high single digits" in percentage points in the second quarter from the first quarter. On Monday, Sun said that it would use microprocessors from No. 1 chipmaker Intel Corp. (Nasdaq:INTC), and that the two had entered a broad engineering relationship to ensure that Sun's Solaris operating system runs optimally on Intel Chips. Sun will continue to buy chips from Intel rival Advanced Micro Devices Inc. (NYSE:AMD), the company said. Many Wall Street analysts, including Deutsche Bank's Chris Whitmore, have said the key to Sun's financial turnaround and return to profit growth will be its ability to leverage its intellectual property in software into revenue gains. Shares of Sun rose 29 percent in 2006, compared with an 11 percent increase in the Merrill Lynch Technology 100 Index, of which Sun is a member, in the same time period.
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