Sun's Net Income Grew 56 Percent
Sun's Net Income Grew 56 Percent On Revenue Growth Of 44 Percent
18 January 2001:
Sun today reported revenues for the second quarter of fiscal year 2001 were US$5.115 billion, up 44 percent compared with the second quarter of fiscal 2000. Orders for the second quarter were US$4.953 billion, representing a year over year increase of 32 percent. Net income for the second quarter was US$552 million, up 56 percent compared with last year's net income of US$354 million (excluding gains on the sale of equity investments and acquisition-related charges for fiscal year 2001).
Second quarter earnings per share was US$0.16, an increase of 60 percent compared with US$0.10 per share for the same period a year ago (excluding gains on the sale of equity investments and acquisition-related charges for fiscal year 2001).
During the second quarter of fiscal 2001, Sun completed the acquisition of Cobalt Networks, Inc. for US$2.061 billion in Sun common stock and stock options. Sun recognized during the second quarter of fiscal 2001 approximately US$130 million in accounting charges related to this acquisition or US$0.04 per share, on an after tax basis.
Including gains on the sale of equity investments and acquisition related charges, reported net income for the second quarter of fiscal 2001 was US$423 million or US$0.12 per share, compared with US$354 million or $0.10 per share for the same period a year ago.
For the first six months of fiscal 2001, Sun reported revenues of US$10.160 billion, up 52% over the corresponding period a year ago. Net income was US$1.062 billion or US$0.31 per share, compared with net income of US$629 million or US$0.19 per share for the first six months of fiscal 2000, increases of 69% and 63%, respectively (excluding gains on the sale of equity investments and acquisition-related charges for fiscal years 2000 and 2001).
Including gains on the sale of equity investments and acquisition related charges, reported net income for the first six months of fiscal 2001 was US$933 million or US$0.27 per share, compared with US$625 million or US$0.19 per share in fiscal 2000.
"Even with the market dynamics the way they are, we still gained more market share this quarter than in previous quarters," said Scott McNealy. "The numbers continue to tell the story, regarding customer acceptance of our products, service and support on a global basis."
McNealy added, "Our new UltraSPARC III based system products are rolling out in volume. During the quarter, we formally announced a new line of server appliance products as well as an extension to the Netra product family, the Netra X1, the first Solaris server incorporating the Sparc Microprocessor, selling for under US$1000. In addition, we announced the Sun StorEdge T3 array support for the Windows, NT, HP-UX, IBM AIX, and Linux system platforms".
McNealy concluded, "With our geographically diversified base and our leading market position, we are poised to take advantage of the market opportunities available to us. Current market conditions will clearly separate the leaders from the followers."
Mike Lehman, Sun's executive vice president of Corporate Resources and chief financial officer, commented, "In a quarter that was a clear example of the volatile dynamics of our industry, our team really delivered like no one else in the industry can." Lehman added "The strength of our world wide business was clearly evident with significant revenue growth in all of our major geographies, particularly Europe and many parts of Asia."
Lehman concluded, "Going forward, we have not changed our message regarding our intention to invest aggressively for market share while, at the same time, delivering on our commitment to generating competitive earnings for our shareholders."
All references to earnings per share set forth in this press release are diluted earnings per share as defined within Statement of Financial Accounting Standards No. 128.
This news release contains forward-looking statements, including statements relating to Sun's expectations to take advantage of market opportunities and its position in the market and Sun's intentions to invest for market share while delivering competitive earnings, which are based on current expectations that involve risks and uncertainties. Sun's actual results may differ materially from the results discussed in these forward-looking statements. Factors that might cause such a difference include risks related to adverse changes in general economic conditions, failure to reduce costs, lack of success in technical advancements, the timely development, production and acceptance of new products and services, and Sun's ability to compete in the highly competitive and rapidly changing marketplace. These and other risks are detailed from time to time in Sun's periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its annual report on Form 10-K for its fiscal year ended June 30, 2000 and its quarterly report on Form 10-Q for the quarter ended October 1, 2000.