Charges worsen loss for Sun Microsystems

Sun Microsystems has reported a loss in the third quarter, as big charges weighed on its finances.

The California based company reported a loss of $760m (€632.7m). The company reported a profit of $4m €3.3m) in the prior-year period.

Sales fell 5% to $2.65bn (€2.20bn), although sales targets were met.

The third quarter included charges of $300m (€249m) for an increase in the valuation allowance for deferred tax assets and $203m (€169m) for job cuts and real-estate restructuring, as well as a gain of $3m (€2.4m) on equity investments. Excluding the items, Sun posted a loss of $260m (€216m).

The company, which is shedding 3,300 jobs, expects to record about an additional $275m (€228m) in restructuring charges over the next several quarters.

Looking forward Sun said plans for the future includes outsourcing through business partners to save costs, selling computers that make use of chips from Advanced Micro Devices to increase revenue, and selling more of its hardware, software and services together for one price.