Clouds gather over Sun in Q1

Sun Microsystems laments economic downturn after suffering massive losses and revenue decline

Server and storage vendor Sun Microsystems endured a bleak start to fiscal year 2009 as its first quarter revenue slumped and losses neared $1.7bn (£1.05bn).

Revenue for the quarter was $2.99bn, down 7.1 per cent on Q1 2008. Net losses based on generally accepted accounting principles stood at $1.68bn, compared with a net profit of $89m during the same period last year.

The heavy loss was largely attributed to a $1.45bn non-cash charge for goodwill impairment. A $63m hit related to company restructuring that got underway in Q4 2008 was also incurred during this year's opening quarter.

Sun chief executive Jonathan Schwartz said: "Although we saw another quarter of growth in our Solaris-based Chip Multi-Threading and Open Storage systems, the economic downturn continued to weigh on our customers, especially those that contribute to our traditional high-end businesses.

"With a continued focus on operational alignment, a strong cash position, and the market increasingly looking to open source innovation as a vehicle to escape proprietary vendor pricing, we believe Sun is well positioned to weather the downturn and ultimately become the biggest beneficiary in the open source revolution in both systems and software."