While Sun turned in first quarter financial results that exceeded Wall Street expectations by one cent today, it cautioned analysts not to up their estimates for future earnings before seeing how it performed in the second fiscal quarter.
Mike Lehman, Sun?s vice president of corporate resources and chief financial officer, warned that the hardware supplier could be adversely hit by the introduction of new server products in the quarter ahead, and also indicated that currency fluctuations and the uncertain outlook in Asia could affect its performance.
He was ?not convinced that we have seen the worst? in Japan and the rest of Asia yet, he said.
For this quarter, however, Sun saw revenues increase by 19 per cent to $2,492 billion, while profits rose 21 per cent to $197.9 million or $0.50 per share. This was before a $80 million charge related to the acquisition of Web application server vendor, NetDynamics.
Despite the gloomy warnings for the quarter ahead, Sun executives, on the whole, painted an upbeat picture of the company?s outlook, particularly with regard to its high-end servers, Java and upcoming Jini technology.
Ed Zander, Sun?s chief operating officer, played down the risk posed by the success of Windows NT. ?In spite of all the noise about NT, we just keep pouring out these [Solaris] workgroup servers?, he said.
In fact, he added that he no longer thought of Solaris as a Unix variant any more, but rather as an operating system in its own right ?in the same class as IBM?s MVS.
Scott McNealy, the company?s chief executive, continued that he sees the server market moving towards an outsourcing model. Businesses will increasingly rent ?Web-tone? and ?computer-tone? from service providers, he claimed, rather than buy and maintain their own systems.
?People don?t want to buy computers?, he argued, adding that the move towards outsourcing would help Sun because it would be based on scalable and reliable servers.
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