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Things can't be too bad when your biggest worries areacquisition-related charges and the successful conversion ofyour order-entry system. Sun Microsystems Inc. yesterdayreported revenue for its 1999 fiscal second quarter, endedDec. 27, of $2.78 billion, up 14% compared with the secondquarter of fiscal 1998. Net income for the second quarterwas $272.3 million, an increase of 22% over the same periodlast year (excluding acquisition-related charges for fiscalyears 1998 and 1999). Second-quarter earnings per share were67 cents, an increase of 18% over the year-ago period(excluding those acquisition charges).
For the acquisitions of Beduin Communications Inc. andi-Planet Inc., Sun took a hit of $12 million. If that moneyis factored into the second quarter, net income is $261.1million and earnings per share comes down to 64 cents. Forthe first six months of fiscal 1999, Sun reported revenueof $5.28 billion, up 16% over the year-ago period. Netincome (excluding 1998 and 1999 acquisition charges) was$470.2 million, up 22% over the same period a year earlier.Earnings per share, excluding those charges, was $1.17, anincrease of 19% from the previous year's results.
Financial analyst Chuck Jones of Salomon Smith Barney Inc.says he believes the transition to new order-entry,manufacturing, and distribution systems were the mainreasons Sun didn't have a particularly strong quarter. "Theywent through a transition with their manufacturing systems,cut over to Oracle applications in October, and it took timefor them to get up to speed," Jones says, "so they spent alot of this quarter getting orders in their backlog out thedoor."
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