Sun Micro Posts $1.7 Billion Loss (Update)

Sun is not alone in feeling the heat from the financial crisis and the souring economy.

Earlier this month, IBM(IBM Quote) said sales of its computer systems were down 11% year over year, with sales for one of its server product lines down 18%.

But the company managed to grow its overall revenue 5% and post a $2.8 billion profit thanks to its diversified business selling technology services, software and hardware across the globe.

Sun's menu of products and its geographic footprint is much more concentrated than some of its rivals however.

In its fiscal first quarter, which ended Sept. 28, Sun wrote down $1.45 billion, which it said reflected the entire amount of goodwill associated with its computer systems business. Sun had warned investors that the write-down was coming in a pre-announcement last week, though it did not specify how large the charge would be at the time.

Sun posted a net loss of $1.67 billion, or $2.24 cents a share, vs. net income of $89 million, or 10 cents a share, in the year-ago period.

Sun said the loss included the goodwill write down, as well as $60 million in restructuring charges and $49 million in stock compensation expenses. Excluding those charges, Sun said its net loss was 9 cents a share.

Analysts polled by Thomson Reuters were looking for a loss of 8 cents a share, excluding most charges, but including the stock compensation expenses.

Revenue in the quarter was down 7% year over year at $2.99 billion, roughly in line with analyst's dampened expectations following the pre-announcement.