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Wed, Oct 01, 2003 - Page 12 News List

Embattled Sun revises results for final quarter

AP , SAN JOSE, CALIFORNIA

Troubled computer maker Sun Microsystems Inc revised its fiscal fourth-quarter results on Monday, taking a US$1.05 billion charge after realizing its first-quarter loss will be greater than expected.

Including the charge, the company now says it lost US$1.04 billion, or US$0.32 per share, in the period ending June 30. Previously, it had reported a small profit of US$12 million, or break-even on a per-share basis, for the period.

Sun said it expects to post a loss of between US$0.07 and US$0.10 for the quarter that ended Sunday. The company declined to be more specific, saying it would report its full results on Oct. 16, as scheduled.

Analysts were expecting Sun to report a first-quarter loss of US$0.02 per share on sales of US$2.71 billion, according to a survey by Thomson First Call.

The charge is to boost a "deferred tax assets valuation allowance," which was calculated when its fourth-quarter earnings were announced July 23 and recalculated before those figures were reported officially to the Securities and Exchange Commission.

The charge was in accordance with the Statement of Financial Accounting Standards No. 109 and generally accepted accounting procedures, said Andy Lark, a Sun spokesman.

"We will continue to review that deferred asset valuation. It could result in an increase or decrease in the future," he said. "That's what makes this a noncash writeoff."

The greater-than-expected first-quarter loss is yet another blow to Sun, which sold the hardware and software that powered much of the Internet during the high-tech boom. The company was hit hard when many customers, including countless dot-coms, went out of business during the tech downturn.

Its proprietary equipment based on the Unix operating system now must compete with rivals' machines that run less-expensive chips and software. Sales of its high-end equipment also face renewed competition from International Business Machines Corp and Hewlett-Packard Co, which offer a wide variety of consulting services.

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