Sun issued a press release with its preliminary results for its fourth quarter, ended June 30. The news is dreadful quarter-on-quarter
Sun expects revenues for the fourth quarter of fiscal 2009 in the range of $2.580 to $2.680 billion, as compared with $3.780 billion for the fourth quarter of fiscal 2008.
Sun anticipates GAAP net loss per share for the fourth quarter of fiscal 2009 in the range of $(0.24) to $(0.34).
That’s a loss of about a quarter of a billion dollars in the last 3 months. In general I’d say this isn’t surprising given that all of their customers are probably holding off on any purchases, and buying from someone else if they can’t wait, until we know what Oracle is going to do with the hardware business.
Ashley Vance has some nice reporting on this at The Register that provides additional context on the Oracle deal. He also includes this comment, which I think is right on
Oracle added that it still believes Sun can contribute more than $1.5bn in operating earnings to Oracle on a non-GAAP basis in that first year, and that Sun’s piece of operating profits can be increased to over $2bn in the second year.
That will be a pretty neat trick, considering that in the past four quarters (running from April 2008 through March 2009), Sun had an operating loss of $1.95bn, and in the similar four quarters a year earlier (from April 2007 through March 2008) it had an operating income of $634m.
Oracle either has to boost sales where Sun has been unable to, or slash costs where Sun has been unwilling to, in order to get to that $1.5bn in operating earnings. I think we all know which way this will be accomplished, right?
A quick way to get to that number in the first year would be to go ahead and sell the hardware business to HP as they had planned to do at the beginning of all this before HP pulled out to deal with their EDS deal. HP is rumored to still have an option to buy that business.