Sun promised to buy back $1bn worth of shares from stockholders today as it announced static revenues and a slump in fourth quarter profits. Revenues came in at $3.78bn for the quarter ending June 30, down 1.4 per cent on the year. Profits collapsed though, coming in at $88m, compared to last year’s $329m. This resulted in …
Flat results in a bad economy, pretty much inline with the pre-announcement two weeks ago, and the shares still get hammered 12%. There's no pleasing some people.
I guess people were just disappointed that JS didn't fall on his sword. Me too.
Stock market is screwed up
Honestly, I have seen more individual thought in sheep, any suggestion of a company not doing 100% or better sets the whole flock running. They put money into a company with a long history of quality products, good management and cutting edge innovation, then crap themselves when they don't get the return they expected due to the company spending money on essential housekeeping, and thats not 'lost money', thats 'made an awful lot of money but not as much as the shareholders want'. Not just sheep but sheep that have learned about greed.
You guys are missing the point
As has been reported in other similar cases in recent years, the single most important reason why this sort of thing happens are pension funds and the rules and regulations they are governed by. When certain metrics are confirmed, those rules and regulations automatically trigger a mandatory sell off even though the fund managers know very well that the companies in question aren't really in such a terrible state. Nothing you can do about it unless you want lax standards for pension funds which isn't such a good idea either. In the long run it is most likely that Sun will recover from their slump and the pension funds will reinvest. Not such a big deal.
Makes sense but there must be an incredible amount of pension funds out there to be putting this kind of dent in the market, not just with sun but with any fairly major company, I would almost go as far as saying more pension funds than pensioners, guessing there is some kind of tax benefit in them. Sounds like the criteria could do with a bit of re-thinking too, if the metric it's self is effecting the market then it's kind of becoming a self-fulfilling prophesy ;)
Dudes, it's kind of obvious...
...Dell, HP, and IBM have all turned in decent to good results while living in the same economy as Sun. Sun hasn't been able to grow revenues (when you take out acquisitions) in a meaningful way since 2001. They are treading water, essentially operating at break even, while their competitors are prospering. This is why their stock is falling - they don't look good on the fundamentals. Investors, whether they be individuals or institutions, put money into stocks to earn a return - Sun isn't providing that return.
Re: Dudes, it's kind of obvious...
I agree, and disagree... Sun is the smallest of the big 4. They also have a much bigger percentage of their revenues from the US. They are not as diversified as the other big 3 so things like a bad economy in the US affects them more. I wouldn't say that the others are "prospering" but they're absolutely holding their own and Sun is not. In the end, we'll see if the many changes that JS claims to be making make a difference... so far his "changes" haven't done much...
HP and IBM are at 5 year highs...Sun...12 year low
Sun's SPARC products are end of life
Sun is trying to get their customers to buy Fujitsu SPARC
Sun is holding onto the "Open Source" Nirvana message and customers are looking to reduce costs
Sun is talking virtualization but does not have a good virtualization product
Sun spent a "cool billion" on MySQL ... I bet they could have gotten it for $250M...or better yet resolved their Oracle relationship problem
I guess after 5 years of begging them to let Sun buy them the price went up http://www.youtube.com/watch?v=d3mSvARJsTg
Anyone on Sun gear from the dot com boom is either looking to get off of SPARC or but cheap Sun stuff until they can move.
Sun bought STK for $2B and the combined revenue is negative....some naive press look at Sun's revenue from 2004 to today and see compound growth and forget they bought STK and they are both treading water.
Sun's optimism is a broken record
KKR will either buy them or dump them....
Sun is no longer a "large cap" stock....the selling has just begun
Sun wasted $3B in the last 6 months buying stock trying to get the stock to go up...and it is at a 12year low...now they play to buy $1B more
The only smart people are dumping Sun or shorting the stock....the stock short is Unreal
It does not help when every employee wants their CEO fired...and you have McNealy engaged again trying to help his successor who is failing
The "chairman of the board" is the lead sales rep
"70% of the world data resides on a Sun platform"
McNealy is smoking dope in his retirement...he is not even playing hockey any more.....and apparently he broke his leg so his golf game is gone.
Scott...you told the board they need a new basketball coach...and they begged you to stay...the time is now to get a new CEO and Chairman...be a man...don't let friendship and emotions kill your baby.
HP should not be cataloged in the "same economy as Sun"... the biggest source of revenue for them is the printer's cartridges and Sun doesn't sell printers or cartridges. If you are talking volume, Sun doesn't sell volume, unlike IBM and Dell... Sun is not as diversified as the others, so they are HARDLY in the "same economy" as them
And the good folks left
Pretty obvious what was going to happen, just take a look at the good guys who left last quarter (Don Grantham et al). Sun has been taking on 'boomerangs' over the last 18 months - folk who used to work at Sun in the 90's (when no one could fail), they moved on, screwed up elsewhere (Dell, Sisco, IBM, CA, etc) and through the buddy network have returned. Failures left at Sun whilst the good guys have moved on to GROW!
Keep it up Sun, reduce the competition or just sell out to Fujitsu.
"HP should not be cataloged in the "same economy as Sun"... the biggest source of revenue for them is the printer's cartridges and Sun doesn't sell printers or cartridges. If you are talking volume, Sun doesn't sell volume, unlike IBM and Dell... Sun is not as diversified as the others, so they are HARDLY in the "same economy" as them"
Really? Look back a bit and you'll realise that HP, IBM and FSC all looked at the market and diversified. Sun did not. They all worked hard in the pre-Y2K boom to build up proprietary server business, but only Sun let blinkered rheotoric and short-sightedness stop them expanding into other areas. Sun's pigheaded management destroyed any chance of working with Intel and Microsoft or the Linux community until it was too late; didn't look into storage but merely assumed third parties like EMC would give Sun some sort of preferential treatment; didn't diversify their software beyond the proprietary UNIX server-client arena, making no efforts to produce for example management software like HP's OpenView range; and didn't even consider the possibility of peripheral areas such as printing, which they looked down on as some kind lesser technology. The writing was on the wall long before the dot-com bubble burst, it was just Sun's management's egos couldn't let them read it. Sun are in the same economy, it's just they've consistantly made the wrong choices, so is it any surprise the markets and Sun's customer don't believe in them now?
@And the good folks left
Would have to agree with there, AC. Just a lot of dead wood in the Sun store and the Cloud blotting out the Sunshine.
And that video of MrNealy ... http://www.youtube.com/watch?v=SAnoSgzk1Cc ...just proves that they've lost their way. Who works with archives whenever they are building the Future. It just smacks of holding onto past glories and that leaves everyone trailing in the race ahead.
And a Jack of all Trades is a Master of None....... especially one who thinks he been there, done that, got the T-shirt.
The Problem for any Business which has Problems is always Right at the Very Top in the Vertical Stack and not in the Horizontal Plane of ITs Applications.