Sun Microsystems Q3 loss soars to $201m

Sun has been hit hard by the recession

A week after Oracle announced its intention to buy Sun Microsystems for $7.4bn (£5.1bn), Sun has reported a $201m (£136m) loss for the third quarter of 2009 ending 29 March.

The figure is substantially larger than the $34m (£23m) decline reported a year ago, and Sun has disappointed analyst expectations with a third quarter year-on-year revenue fall from $3.26bn to $2.61bn (£2.2bn to £1.76bn).

Hardware makes up about half of Sun's sales, and the company has been hit hard by the recession as it is these costs that businesses are tending to cut when looking at budget reductions.

Sun announced 6,000 job cuts in November, which it said would cost $500m to $600m (£339m to £600m) over the next 12 months, and result in annual savings of $700m to $800m (£474m to £542m). Sun also announced the departure of Rich Green, head of its software division, in November.

The latest earnings report shows that Sun spent $46m (£31m) on restructuring in the previous quarter.

Sun did not provide any comment on its earnings, or hold its usual conference call, probably because of the impending Oracle purchase.

Oracle expects the deal to generate more profit than the combined acquisitions of BEA, PeopleSoft and Siebel, forecasting Sun to contribute over $1.5bn (£1.01bn) to its non-GAAP operating profit in the first year, and more than $2bn (£1.35bn) in its second year.