Updated from 4:26 p.m. EDT

Sun Microsystems

(SUNW) - Get Report

on Tuesday topped Wall Street's earnings target for its fiscal fourth quarter even as sales growth continued to elude the technology giant.

After hours, shares of the network computer company recently rose 14 cents to $3.99 on the results, as company executives continued to focus on improvements and initiatives that they hope will eventually lead to sales growth.

"We feel we have a lot of momentum," said CFO Steve McGowan during a conference call. He cited improved gross margins, reduced spending on overhead and R&D, continued positive cash flow and a "stabilization of revenue."

For the quarter ended June 30, Sun reported net income of $121 million, or 4 cents a share, on sales of $2.98 billion. During the same quarter last year, the company earned $783 million, or 23 cents a share, on sales of $3.11 billion.

Excluding one-time charges and benefits, Sun earned 6 cents a share vs. a loss of 5 cents a share in the same quarter last year. Analysts had expected earnings excluding charges of a penny a share and sales of $2.98 billion, on average, according to Thomson First Call.

As for indicators of what's to come, Sun's book-to-bill ratio for its products was 1.03-to-1, its total product and services backlog grew to $1.45 billion from $1.33 billion in the third quarter and deferred revenue rose to $2.19 billion from $1.91 billion in the previous quarter.

Sun, as usual, does not provide targets for upcoming periods, but the executives did say they expected to be profitable for the new fiscal year. This target excludes the impact of any acquisitions, including the buyouts of

StorageTek

(STK) - Get Report

and

SeeBeyond

(SBYN)

, and the expensing of employee stock options.

CEO Scott McNealy says he is pleased with the progress being made on the acquisitions so far, but the only update he provided was that shareholder votes are scheduled for SeeBeyond on Aug. 25 and for StorageTek on Aug. 30. Both deals are expected to close soon thereafter.

Sun's first quarter is typically weaker than its other quarters, but executives declined to comment on the extent of seasonality expected during the coming three months.

McNealy said that Sun hasn't finished buying corporations. "We will continue to act as a consolidator on an opportunistic basis."

Shares of Sun closed the regular session unchanged at $3.85.