Friday, January 14, 2005

WSJ.com - Sun Posts Profit, but Revenue Slips

WSJ.com - Sun Posts Profit, but Revenue Slips: "Sun said unit sales of servers grew 16% in the second quarter from a year earlier, while demand for a new line of systems based on AMD Opteron chips more than doubled. But revenue from its computer-hardware business declined 4%, suggesting that the average selling price of its systems have fallen sharply.
Indeed, Mr. McNealy said the company is trying to use price as a weapon against the competition, particularly in low-end systems, where he said Sun is 'absolutely the low-cost provider in the marketplace.'
But Toni Sacconaghi, an analyst at Sanford Bernstein, said he sees little improvement in Sun's marketplace momentum. Adjusting for currency benefits, he estimated Sun's revenue declined about 4.5% in the second quarter -- a time when the computer market grew about 10%. 'We are still talking about a company that is underperforming the market by 10 percentage points, which is pretty significant,' he said."
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