Analyst Conference Summary

Sun Microsystems

conference date: May 1, 2008 @ 1:30 PM Pacific Time
for quarter ending: March 30, 2008 (3rd fiscal quarter 2008)

Forward-looking statements

Please note: Despite my repeated attempts, Sun's Edgeboss technology proved incapable of serving the audio re-broadcast of the conference to my computer. Sun has become boring and I'm not going to continue to summarize its analyst conferences. The data below is from the press release and financial tables.

Overview: Stagnant revenues and a GAAP net loss haunt this once-great compute company. But cash from operations was strong.

Basic data:

Revenues were $3.27 billion, down 0.5% from $3.28 billion year-earlier.

Net loss was $34 million, down from net income of $67 million year-earlier.

EPS (earnings per share) were negative $0.04, down from positive $0.07 year-earlier.

Conference Highlights:

Poor performance was attributed to the U.S. economy, "masking our progress in developing nations and economies around the world."

Gross margin was 44.9%, up 0.4% from year-earlier. MySQL acquisition related charges reduced EPS by about $0.04.

Cash from operations was $329 million. Cash and equivalents ended at $3.8 billion, including $774 million classified as long-term debt securities. $300 million was spent on stock repurchases. Long term debt $1.28 billion.

Especially rapid growth in India and Brazil. 12 of its 16 seles geographies showed y/y revenue growth.

CMT (Chip Multi-threading) systems revenues more than doubled y/y. Blade systems also did particularly well.

Product revenue was $2.00 billion. Services revenue $1.26 billion.

Cost of sales was $1.80 billion. Gorss margin was $1.49 billion. R&D expense was $0.46 billion. SG&A expense $0.99 billion. Restructuring, impairment, and purchased R&D expense was $38 million. Operating expenses totaled $1.48 billion. Operating loss was $16 million. Interest income $34 million, tax provision $52 million.

Non-cash stock compensation expense was $57 million.

Diluted share count 785 million.

Inventories ended at $735 million. Accounts receivable dropped to $2.41 billion.

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Disclaimer: Our analyst summaries may include both our condensations of statements made by company representatives and our own analysis. They are not covered by any warranty. We cannot guarantee anything said by company representatives is true. We try not to make errors, but it is possible. Before making or terminating an investment you should always verify any factual basis of your decision.

Copyright 2008 William P. Meyers