Sun Narrows 2Q LossesSun Narrows 2Q Losses

Sun Microsystems is still running in the red, though the tide has slowed somewhat.

Sun reported Thursday that it lost $125 million in its second quarter, ended Dec. 28, on revenue of $2.89 billion. That's an improvement from a loss of $286 million on revenue of $2.54 billion in the first quarter--and a huge gain from the loss of $2.28 billion on revenue of $2.29 billion it reported in the same period a year ago.

The loss per share in the most recent quarter was 4 cents, compared with a loss of 72 cents in the same period a year ago. For the first half of fiscal 2004, Sun reported a per-share loss of 13 cents, compared with a loss of 75 cents in the first half of fiscal 2003. Sun reported losses totaling nearly $3 billion in its two previous fiscal years, and through the first two quarters of fiscal 2004, losses have totaled $411 million.

Sequential growth in the quarter was 13.9%--the highest first-to-second-quarter growth since 1998.

Sun CEO and president Scott McNealy said the second-quarter showing represented progress and pointed to an alliance with Advanced Micro Devices Inc., revealed in November, as an example of recent activity that's expected to show bottom-line dividends.

As part of the AMD alliance, Sun is delivering Sun Fire servers based on AMD's Opteron processor, with versions utilizing Solaris, Java, and Linux.

"We continue to be confident that these investments, along with our ongoing focus on operating efficiency and quality, will deliver increasing value to our customers and partners worldwide," McNealy said in a statement.

Sun continues to try to cut costs. It confirmed Thursday that it's consolidating some manufacturing and will lay off 300 employees at its facility in Newark, Calif. The work once done in Northern California will be transferred to Oregon and Scotland. Sun has about 35,000 employees worldwide.