Prepping for Oracle, Sun predicts weak results

Jul 14, 2009 By ANDREW VANACORE , AP Business Writer

(AP) -- Sun Microsystems Inc. projected quarterly results below Wall Street estimates Tuesday, signaling it will clear some charges off its books ahead of its $7.4 billion acquisition by Oracle Corp.

Sun said it expects one-time items to widen its loss to between 24 cents and 34 cents per share. The results will take into account charges for stock-based compensation, restructuring and the reduced value of long-held assets, among other factors.

Charges just ahead of are fairly typical as companies look to get costs off their books that could affect the acquirer's after a deal closes, analysts said.

Cross Research analyst Richard Williams called it a "kitchen sink" quarter. Williams said he sees no obstacles for Oracle's acquisition, which is set to close this summer.

Excluding items, Sun expects a loss of 6 cents to 16 cents per share. Sales for the and are expected to be between $2.58 billion and $2.68 billion, down from $3.78 billion a year ago.

The forecast, offered almost two weeks ahead of Sun's scheduled earnings release, fell below expectations. Analysts polled by Thomson Reuters, who typically exclude special items from their estimates, forecast a loss of a penny per share on sales of $3.03 billion.

Curtis Shauger, an analyst with Caris & Co., said the shortfall was not a surprise given that sales usually suffer before a planned acquisition. "Buyers get cold feet ahead of these things," Shauger said.

In a statement, said it has reviewed Sun's preliminary results and reaffirmed that it expects Sun to add at least 15 cents per share to its adjusted earnings in the first year after its acquisition closes. It expects Sun to contribute more than $1.5 billion to adjusted profit over the first year and more than $2 billion the next.

Oracle shares fell 15 cents to $20.57 in morning trading. Sun shares were unchanged at $9.16.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: Out-of-patience investors sell off Amazon

add to favorites email to friend print save as pdf

Related Stories

Oracle tops forecasts despite sales, profit dip

Jun 23, 2009

(AP) -- Software maker Oracle Corp.'s results topped Wall Street's forecast for the latest quarter Tuesday, despite a 5 percent drop in sales and a 7 percent decline in profit.

As Oracle readies takeover, Sun's loss widens

Apr 28, 2009

(AP) -- Sun Microsystems Inc.'s loss ballooned in the latest quarter as restructuring charges and a 20 percent drop in sales compounded the financial woes Oracle Corp. is set to inherit by acquiring Sun for ...

EA posts smaller 4Q loss as costs decline

May 05, 2009

(AP) -- Video game publisher Electronic Arts Inc. posted a smaller net loss Tuesday for its fiscal fourth quarter as it further slashed costs in a quarter that had fewer hit game launches.

Verizon 1st-qtr profit, revenue beat expectations

Apr 27, 2009

(AP) -- Verizon Communications Inc. said Monday its earnings grew 5 percent in the first quarter, boosted by its acquisition of Alltel Corp. and strong demand for its wireless, Internet and TV services.

Recommended for you

Out-of-patience investors sell off Amazon

12 hours ago

Amazon has long acted like an ideal customer on its own website: a freewheeling big spender with no worries about balancing a checkbook. Investors confident in founder and CEO Jeff Bezos' invest-and-expand ...

States ascend into the cloud

18 hours ago

Seven years ago, the state of Delaware started moving computer servers out of closets and from under workers' desks to create a consolidated data center and a virtual computing climate.

Microsoft drops Nokia name from smartphones

20 hours ago

Microsoft said Friday it was dropping the Nokia name from its Lumia smartphones, rebranding following the acquisition earlier this year of the Finnish group's handset division.

Amazon's loss makes holidays a question mark

21 hours ago

Amazon's trademark smile icon is becoming more of a grimace. The world's largest online retailer reported a wider third-quarter loss than analysts expected and gave a disappointing holiday forecast.

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

RayCherry
not rated yet Jul 15, 2009
Oracle Cloud?