Updated from 1:57 p.m EST

With its first profit in a year under its belt,

Sun Microsystems'

(SUNW) - Get Report

senior management set out to convince Wall Street on Tuesday that the modest profit it earned in its last quarter was a taste of more to come -- and not a one-time anomaly.

Sun is on a journey to consistent revenue growth and profitability, executives told financial analysts gathered in San Francisco for the company's annual analyst day.

"We are now fully outfitted to pursue 100% of the market," said CEO Jonathan Schwartz. "There is no opportunity that we're precluded from bidding on. There is no customer we cannot serve."

The briefing with analysts was the first led by Schwartz and CFO Mike Lehman, since the two Sun veterans assumed their latest roles at the Santa Clara, Calif., company,

in April and February 2006, respectively.

At this time last year, the two jobs were filled by co-founder Scott McNealy and Steve McGowan, both of whom retired in 2006.

But coming on the heels of a slew of changes, including the senior management changes, layoffs and

recent deals with

Intel

(INTC) - Get Report

and private equity firm Kohlberg Kravis Roberts, there seemed to be little new information left to share at Tuesday's meeting.

Lehman reaffirmed Sun's target of notching a 4% operating margin in its fiscal fourth quarter, which ends in June.

But he didn't offer guidance for the company's fiscal 2008 year, which begins this summer, saying the company was still in the process of fleshing out its operating plan for the year.

For his part, Schwartz stuck to familiar themes, such as Sun's strategy of courting the online developer community with free access to Java and Solaris software in order to sell more hardware and services.

"For Sun our business model is defined by volume," he said. "Volume drives value. More people coming online, means more business opportunities for Sun."

As of Monday, said Schwartz, more than 7.1 million copies of its Solaris operating system have been downloaded over the Internet.

Sun made Solaris free and open source in 2005, one of many recent moves by Sun to turn its business around and break out of the funk that has afflicted its business since the dot-com crash nearly six years ago.

In December 2005, Sun began selling servers that packed industry-standard x86 microprocessors from

Advanced Micro Devices

(AMD) - Get Report

, and now to Intel, in addition to Sun's traditional line of servers that run its proprietary Sparc processors.

And Sun has pushed the innovation envelope with products such as its so-called Thumper, a machine that combines the traditionally separate server and storage hardware.

This kind of cross-platform innovation allows Sun to leverage its investments in R&D and to continue to thrive in a hardware market that is increasingly become commoditized, Sun executives said.

"Differentiation is a function of R&D," said Schwartz. "We don't just show up and deliver an Intel Xeon chip."

Going forward he said, Sun's R&D efforts will focus on general-purpose technology that can be applied to Sun's four major markets: servers, storage, software and services.

The amount of money Sun spends on R&D will decrease both in absolute dollars and as a percentage of revenue, said Lehman, as the company continues to look for ways to wring costs out of the business and achieve its long-term operating margin target of 10%.

Lehman said that Sun's cost structure is still too high, despite recent moves to

shed 11% to 13% of the company's staff. Rather than more large-scale layoffs or sales of real estate assets, however, Lehman said the cost savings going forward would be more gradual.

The company is in the process of implementing a multiyear, $200 million

Oracle

(ORCL) - Get Report

enterprise software implementation, which will allow the company to save money by eliminating more than 1,000 disparate systems currently running under Sun's roof.

The first payback from the investment however, won't occur until 18 to 24 months after the system's final phase of deployment, at the start of fiscal 2009.

"Our philosophy hasn't changed," said Lehman. "We're going to plan for reasonable revenue growth, increased gross margin and lower operating expenses."

Last month, Sun surprised the Street by reporting $126 million net income for its fiscal second quarter. The company had not expected to turn a profit until its fiscal fourth quarter.

Analysts polled by Thomson Financial expect Sun to earn 10 cents a share on sales of $14.2 billion in its current fiscal 2007 year. In fiscal 2008, analysts expect EPS to double to 20 cents on sales of $14.86 billion.

Lehman said the company was in the process of discussing whether to buy back shares of the company, given its recent $700 million infusion of cash from KKR.

The other likely use of the funds would be for acquisitions, although Schwartz shot down recent rumors of a potential

Novell

( NOVL) acquisition.

"We're not going to go out and buy Novell," Schwartz said.

Sun hasn't lined up a string of candidates for acquisitions, Schwartz said, although he said that the company is interested in acquiring core intellectual property assets and "differentiating capabilities."

"Our main focus of our cash and the strength of our balance sheet is to grow. But the money not burning a hole in our pocket," said Schwartz.

The meeting is scheduled to last the full day, with more briefings by various Sun division heads.

Shares of Sun finished Tuesday's regular trading session down 1.6%, or 11 cents, at $6.53.