18 January 2002 Systems vendor Sun Microsystems has posted a third consecutive quarter of deep losses following a 39% plunge in sales in the three months to the end of December.

Revenues in the second quarter of fiscal 2002 shrank to $3.1 billion (€3.5bn) from the $5.1 billion (€5.76bn) achieved in the same period a year earlier. Net losses weighed in at $431 million (€487.8m), compared to net income of $423 million (€478.1m) posted in the second quarter of fiscal 2001.

Sun CEO Scott McNealy said that exceptional charges resulting from redundancies and restructuring had pushed the company deep into the red. Excluding those one-off charges, losses amounted to $99 million (€111.9m).

The company blamed the grim figures on the global economic downturn and the consequent slowdown in IT spending. Sun sold the servers of choice for many telecoms and dot-com companies in the 1990s Internet boom. It has therefore been harder hit by the dot-com and telecoms crashes than many of its competitors.

At the low end it has also been hit by the migration of customers to the open source Linux operating system.

But chief financial officer Michael Lehman insisted that Sun will return to profitability in its fourth quarter to the end of June 2002. “Despite economic uncertainties, Sun is still investing in product development and core competencies to promote the long-term growth of the company.”