SAN FRANCISCO – Sun Microsystems Inc.’s fiscal second-quarter profit nearly doubled to edge past Wall Street’s estimates Thursday, reflecting the server and software maker’s cost-cutting efforts and maneuvers to shore up demand amid fierce competition.
The Santa Clara-based company’s results, released after the market closed, followed a rally fueled by investor optimism about the results.
Sun’s stock rose $1.30, or nearly 9 percent, to $16.12. And in after-hours trading, it gained another 23 cents, rising to $16.35.
Shareholders’ enthusiasm hasn’t been enough to lift the stock price back up to the $20 range where it stood after Sun executed a 1-for-4 reverse stock split in November. The essentially cosmetic move was intended to shed the stigma of slumping shares.
Sun’s net income leaped 95 percent, rising to $260 million, or 31 cents per share, for the three months ended Dec. 30. That was a penny higher than the average estimate of analysts surveyed by Thomson Financial, and nearly twice as high as Sun’s profit of $133 million, or 15 cents per share, during the same period a year earlier.
The profit came in at the high end of a range Sun had pre-announced during the quarter.
Sales during the latest quarter were $3.61 billion, slightly higher than the $3.59 billion Wall Street was expecting. They only inched up from the same period last year, when Sun registered $3.57 billion in sales.
Sun executives frequently point to the company’s efforts to lower its manufacturing costs and improve the profitability of its products as signs its turnaround efforts are bearing fruit.
The company is facing intensifying competition from rivals such as IBM Corp. and Hewlett-Packard Co. in the market for the servers that power corporate data centers and services to support them.
But Sun also broadened its strategy of partnering with one-time foes to increase the adoption of Sun products, a strategy that has worried some investors because of the potential to speed the adoption of rivals’ products at Sun’s expense.
