Sun CFO Reaffirms Q4 Outlook

Sun Microsystems Inc., which turned a rare profit last quarter, is on track to reach its previously stated goal of a 4 percent operating profit margin by the end of the fiscal year, the company's chief financial officer said Tuesday.

Operating profit margin, which measures how much a company makes before interest and taxes on each dollar of revenue, is viewed as a key measure of a company's ability to control the normal costs and expenses of running a business. Sun's goal is to reach a 10 percent operating margin by the fiscal year 2009.

While reaffirming those goals, Sun's CFO Michael Lehman nonetheless struck a cautiously optimistic tone at a meeting of financial and industry analysts in San Francisco in describing the challenges ahead for the server and software maker. The Santa Clara-based company was once a dot-com darling but has incurred more than $5 billion in losses since 2002.

Lehman did not provide further guidance about the coming third quarter, instead saying the company intends to pursue "reasonable" revenue growth going forward in a "very competitive" market for its corporate computers and software.

Sun has previously forecast revenue of between $3.38 billion and $3.45 billion for the third quarter.

"We're making progress, we're not perfect, and the team is very focused on what we need to do in the near term for revenue improvement," Lehman said.

Shares of Sun lost 11 cents to close at $6.53 on the Nasdaq Stock Market.

Last month, Sun reported a rare profitable quarter, beating analyst estimates by 3 cents per share in the second quarter and stoking hope among investors about a sustained turnaround at the notoriously cyclical company.


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