Sun’s Business in Shambles Thanks to “Uncertainty Associated With the Proposed Acquisition by Oracle”
by John Paczkowski
Posted on November 6, 2009 at 3:51 PM PT
“The decrease in _____ revenue was primarily due to _____” and “uncertainty associated with the proposed acquisition by Oracle and increased competition.” That refrain is repeated over and over again in Sun’s latest grim earnings report, which was filed without much in the way of announcement Friday afternoon.
According to a 10-Q filing with the Securities and Exchange Commission, Sun (JAVA) lost $120 million, or 16 cents a share, on revenue of $2.24 billion in its first quarter. During the same period a year ago, Sun lost $1.68 billion, or $2.24 a share, on $2.99 billion in sales. Analysts had been expecting earnings of 25 cents a share on revenue of $2.31 billion.
Oracle (ORCL) CEO Larry Ellison recently said that Sun is losing about $100 million a month as it waits for European antitrust regulators to approve its acquisition by Oracle. Looks like he’s about right.
Below, excerpts from the 10-Q:
Server Products Revenue
The decrease in Server Products revenue during the first quarter of fiscal 2010, as compared to the corresponding period in fiscal 2009, was primarily due to the economic downturn and consolidation of our customer base, specifically in the financial services sector, as projects were scaled back, delayed or canceled, in addition to the uncertainty associated with the proposed acquisition by Oracle and increased competition.Storage Products Revenue
The decrease in Storage Products revenue during the first quarter of fiscal 2010, as compared to the corresponding period in fiscal 2009, was primarily attributable to the economic downturn as projects were scaled back, delayed or canceled, in addition to the uncertainty associated with our proposed acquisition by Oracle and increased competition.North America
The decrease in revenue during the first quarter of fiscal 2010, as compared to the corresponding period in fiscal 2009, was primarily due to decreased sales of our enterprise Server Products, storage disk products and Services. We are still seeing the results of IT budget cuts instituted last year by our largest customers due to the economic downturn, especially in the financial services sector, in addition to the consolidation of our customer base. Across all sectors, non-critical projects are on hold. Revenue was also negatively impacted by the uncertainty associated with our proposed acquisition by Oracle and increased competition.
PREVIOUSLY:
- European Union Mulling Objection to Oracle-Sun Deal
- Q: What’s the Difference Between Neelie Kroes and Larry Ellison?
- Sun to Sack 3,000
- Former MySQL Boss to EC: Approve Oracle-Sun Deal
- Ellison: Oracle Is the New IBM
- Mr. Ellison Asks That His Burgers Be Served With Freedom Fries Until Further Notice
