Sun expects sharp revenue drop ahead of Oracle vote
- — 15 July, 2009 04:42
Sun Microsystems said it expects to report a sharp drop in sales for the June quarter as it prepares to put its planned acquisition by Oracle to a shareholder vote later this week.
Revenue for Sun's fourth fiscal quarter, ended June 30, is likely to be between $US2.58 billion and $US2.68 billion, down from $US3.78 billion in the fourth quarter last year, Sun said on Tuesday.
The loss is expected to be in the range of $US0.06 to $US0.16 per share, wider than the $US0.03 per share that analysts had been expecting, according to Thomson Reuters.
Sun is due to report its full results no later than Aug. 31, the company said.
Oracle, which announced in April that it plans to buy Sun for $US7.4 billion, said on Tuesday that it still expects the deal to add to its earnings in the first full year after closing.
Sun's shareholders are due to vote on the merger Thursday morning, at a special stockholder meeting in Santa Clara, California. A majority of Sun's outstanding shares must be voted in favor of the deal for it to go ahead. Sun's board has recommended voting in favor of the agreement.
Sun stockholders would receive $US9.50 in cash, before taxes, for each Sun share they own. Sun's shares were trading at $US9.17 late Tuesday afternoon, up from $US5.98 before the agreement with Oracle was announced.
Oracle CEO Larry Ellison has said he bought Sun primarily for its software assets, but in a move to quell concerns among Sun customers he also pledged to continue the development of Sun's Sparc processor.
"Sun was very successful for a very long time selling computer systems based on the Sparc chip and the Solaris operating system," Ellison said in a May regulatory filing.
"Now, with the added power of integrated Oracle software, we think they can be again."