Sun Micro, Broadcom Beat Quarterly Earnings Expectations

Shares of both companies have jumped in after-hours trading.
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Sun Microsystems

(SUNW) - Get Report

reported first-quarter earnings late today that beat Wall Street analysts' estimates by 2 cents, continuing a trend that it started more than five years ago.

Another highflying technology company,

Broadcom

(BRCM)

, also reported strong earnings after the stock market closed, besting estimates by 6 cents.

In after-hours trading, Sun's stock gained more than a point after closing the day up 1/16 at 89 13/32 on the

Nasdaq

. Broadcom's stock leaped 5, after ending regular Nasdaq trading down 2 5/8 to 116 13/16.

The strength of Sun's earnings was far from a surprise: The Palo Alto, Calif.-based hardware and software maker has met or exceeded analyst expectations for every quarter but one since June 1994. Still, analysts fired a barrage of questions at company executives during a teleconference call late this afternoon.

"It was hard to find even a nick in what they reported, what they stated for their future or what they said on their call," said Laura Conigliaro, an analyst for

Goldman Sachs

who includes Sun on her recommended list. "Everybody always rides Sun hard because it's a company that, at least until not so long ago, was not in the mainstream." (Goldman Sachs has not done any underwriting for Sun.)

Sun reported that net income for its first fiscal quarter ended Sept. 26 rose 39% to $274.8 million, or 33 cents a diluted share, from $197.9 million, or 25 cents a share, in the year-ago period. (Figures for both quarters exclude acquisition-related costs.) Analysts polled by

First Call/Thomson Financial

had projected that Sun would earn 31 cents a share in the latest quarter.

Revenue rose 25% to $3.1 billion from $2.5 billion in the year-ago period.

At the teleconference, Sun executives said they would continue to focus on providing products for clients but would not move into such services as providing Internet access. While Sun's competitors -- such as

IBM

(IBM) - Get Report

and

Microsoft

(MSFT) - Get Report

-- may be heading in that direction, Sun's executives don't believe their clients want them to do the same.

"Customers love our strategy," Ed Zander, the company's president and chief operating officer, said in the teleconference, adding that Sun is the "thought leader for the Internet age."

Conigliaro agreed with Zander, saying Sun has a "single-mindedness" by just providing computer servers to its clients, making it clearer and more attractive for those clients to conduct business with Sun.

Meanwhile, Broadcom reported its third-quarter earnings more than quadrupled to $27.2 million, or 23 cents a diluted share, from $5.2 million, or 5 cents a share, in the year-ago period. Excluding an acquisition-related charge in the latest quarter, the company said it had earnings of 26 cents a diluted share. Analysts polled by First Call/Thomson Financial had been expecting earnings of 20 cents a share.

Broadcom, a communications-chip maker based in Irvine, Calif., said its revenue rose 149% in the quarter to $138.4 million from $55.5 million a year earlier.

In a statement, Henry Nicholas 3rd, Broadcom's president and CEO, attributed the higher earnings in part to the expanding range of products that the company offers.