Sun Earnings Jump 32 Percent in First Quarter

Sun Microsystems Inc. said first-quarter earnings jumped 32 percent over the previous year, to 33 cents per share, on record revenues of $3.1 billion.

The results beat by two pennies a consensus estimate of financial analysts, who expected Sun to show a profit of 31 cents per share, according to First Call Corp. Last year the company reported earnings of 25 cents per share in the same quarter.

Net income for the quarter, which ended Sept. 26, was $274.8 million, up 39 percent from a year ago, excluding charges related to its acquisition of Star Media Corp. Including the charge of $3.5 million for in-process research and development, income was $271.1 million.

The company's revenues of $3.1 billion are up 25 percent from the first quarter of 1998, when sales totalled $2.5 billion.

"Our success in the first quarter came at the expense of our traditional competitors," Chief Executive Officer Scott McNealy said in a statement. "We gained share in many of our key markets, especially in servers for the Internet and service providers."

Almost a million copies of the StarMedia productivity software, which is offered at no charge on the Internet, have been downloaded in the past month, McNealy said in the statement. Strong support for its Java technology and Solaris servers are evidence that Sun's Internet strategy is working, he added.

The company saw strong year-over-year growth rates in all geographic segments, and is well positioned for the future, the company said.

Sun didn't provide a breakdown of its sales by product segment.

Sun, in Mountain View, California, can be reached at +1-650-960-1300, or at http://www.sun.com.

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