SUN MICROSYSTEMS REPORTS SECOND FISCAL QUARTER RESULTSSUN MICROSYSTEMS REPORTS SECOND FISCAL QUARTER RESULTS
SANTA CLARA, Calif. - January 16, 2003 -- Sun Microsystems, Inc. (NASDAQ: SUNW) a leader in systems and solutions that make the Net work, reported results today for its fiscal second quarter which ended December 29, 2002. Revenues for the second quarter were $2.915 billion, a decline of six percent as compared with $3.108 billion for the second quarter of fiscal 2002. Total gross margin as a percent of revenues was 43.3%, an increase of 6.7 percentage points as compared with the second quarter of fiscal 2002. Net loss for the second quarter of fiscal 2003 was $2.283 billion or $.72 net loss per share. Net loss for the second quarter includes a $2.125 billion expense related to the impairment of goodwill and other intangible assets. In addition, Sun recognized in the second quarter $357 million in expense related to previously announced restructuring actions. Excluding these items, as well as an in-process research and development expense of $4 million, losses on equity investments of $11 million and the related tax benefit of $204 million for all of these items, net income for the quarter was $10 million, slightly better than break-even on a per share basis. This compares with a net loss excluding special items of $99 million for the second quarter of fiscal 2002. On a sequential basis, revenues for the second quarter of fiscal 2003 increased $168 million or six percent from the first quarter. Gross margin as a percent of revenue for the second quarter increased 2.1 percentage points from the overall gross margin percentage in the first quarter of fiscal 2003. Net loss for the second quarter increased $2.172 billion from the net loss of $111 million for the first quarter of fiscal 2003, primarily due to the impairment of intangible assets and restructuring charges. Net loss excluding special items improved $88 million from a net loss of $78 million to a net income of $10 million. Steve McGowan, Sun's Chief Financial Officer and Executive Vice President of Corporate Resources said, "Despite the difficult economic environment, we are pleased that, on a sequential basis, we grew revenue, improved our gross margin percentage and reduced operating expenses, and achieved positive cash flow from operations." McGowan added, "Overall, our balance sheet is very strong with more than $5 billion in cash and marketable securities and net equity of over $7 billion." Sun's Chairman, CEO and President Scott McNealy said, "The Sun team put in a solid performance this quarter. We delivered sequential quarterly revenue improvement, lower costs and better value to customers, and growth in key businesses." McNealy added, "SunServices, Sun StorEdge and UltraSPARC® III processor-based servers, particularly our Sun Fire V880, 4-way, and 8-way UNIX® servers, and Sun Fire 12K and Sun Fire 15K servers performed well. We taped out next generations of our UltraSPARC family, rolled-out ground-breaking software offerings such as the Solaris 9 Operating Environment for x86 servers and the capacity on demand breakthrough software that allows network computing to be provisioned as needed." Sun has scheduled a conference call today to discuss its earnings for the second quarter of fiscal year 2003 at 1:30 p.m. (PT), which is being broadcast live at www.sun.com/investors. About Sun Microsystems, Inc.Since its inception in 1982, a singular vision -- "The Network Is The Computer" -- has propelled Sun Microsystems, Inc. (Nasdaq: SUNW) to its position as a leading provider of industrial-strength hardware, software and services that make the Net work. Sun can be found in more than 100 countries and on the World Wide Web at http://sun.com
Sun, Sun Microsystems, the Sun logo, Sun StorEdge, Sun Fire, Solaris, and The Network Is The Computer are trademarks or registered trademarks of Sun Microsystems, Inc. in the United States and in other countries. All SPARC trademarks are used under license and are trademarks or registered trademarks of SPARC International, Inc. in the United States and other countries. Products bearing SPARC trademarks are based upon an architecture developed by Sun Microsystems, Inc.PR Contacts for Press and Analysts:
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