IBM rises as Sun sets

By Alun Williams

Posted on 17 Jan 2003 at 17:01

There is a contrast in fortunes for IBM and Sun today as the two server giants reveal their quarterly financial results. IBM in the black, Sun in the red.

Sun Microsystems has revealed a six per decline in revenues - $2.915 billion, a decline of six percent compared with $3.108bn the same period a year ago. This contributed to losses of $2.28bn, reportedly the company's largest ever.

As well as tough trading conditions, this bottom line figure was affected by one-time charges related to previous unsuccessful acquisitions and the costs resulting from staff redundancies.

Sun's Chairman, CEO and President Scott McNealy described the performance as 'solid', claiming the quarter had delivered - as compared to the previous three months - increased revenue, lower costs and some growth in market share.

'SunServices, Sun StorEdge and UltraSPARC III processor-based servers, particularly our Sun Fire V880, 4-way, and 8-way UNIX servers, and Sun Fire 12K and Sun Fire 15K servers performed well,' claimed McNealy. 'We taped out next generations of our UltraSPARC family, rolled out ground-breaking software offerings such as the Solaris 9 Operating Environment for x86 servers and the capacity on demand breakthrough software that allows network computing to be provisioned as needed.'

IBM, by contrast, met analysts' expectations. Its fortunes had worsened from 2001, however.

Revenues for Big Blue stood at $23.7 for the fourth quarter were $23.7bn, up 7 percent from the same period a year ago. For the year as a whole, income was reported as $5.3 billion, down from the $8.1bn of the previous year. Revenues totalled $81.2bn, a fall of 2 per cent against 2001's figures.

Samuel J. Palmisano, IBM chairman and CEO, emphasised that IBM had also delivered a 'solid' quarter and had finished strongly in what was a difficult year. 'We continued to gain share in our core businesses and managed our company very well in a tough environment,' said Palmisano. 'Our e-business on demand strategy is resonating as more customers look to IBM to improve productivity and drive competitive advantage.'

He highlighted the strength of IBM's software portfolio, following the takeover of Rational Software, and the role of IBM Global Services, which he claimed had gained in market share and delivered revenue of more than $18bn.

For those wanting to drill down in detail, you can find more figures at sun.com/investors/ and ibm.com/investor/.