Jonathan Schwartz unveiled a sparkling, in the circumstances, set of results which appear to have justified his actions since taking over as CEO.
Compared to the first fiscal quarter of 2006 (Q1 FY 06) revenues for Q1 FY 07 were a satisfying 17 percent higher at $3.189 billion. Sun's Computer Systems Products Group recorded the third consecutive quarter of year-over-year revenue growth. It looks both substantial and sustainable and should lead, if this growth trend continues, to the sunny uplands of profit.
In Q1 FY 06 the net loss was $123 million. In Q1 FY 07 it was $56 million, down by over 50 percent. Take away these items in the net loss: $21 million of restructuring and related impairment of asset charges; $7 million benefit for related tax effects; $58 million of stock-based compensation charges; and $79 million of intangible asset amortization relating to recent acquisitions, and Sun would have theoretically broken even.
If these special costs don't recur than Sun could break into profit early next (calendar) year.
Sun grew faster than its competition and Jonathan Schwartz was pleased to say so: "It's great to grow faster than the competition, maintain strong gross margins and see continued adoption of Solaris on HP, Dell and IBM computers. Customers across the world are turning to Sun as the safe choice for open source innovation, for industry leading identity and security management platforms and for the most eco-responsible infrastructure to power the network."
It could be that we are seeing a halo effect as what we might term Sun's bread and butter sales of systems (Sparc, Opterons), storage and services get boosted by the glamour and charisma of eye-catching technologies like Thumper (X4500), Project Blackbox, ZFS, and Honeycomb. Sun also seems to be surfing the open source software wave exceptionally well and Solaris is, well, the word booming comes to mind when we look at the download numbers.
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