Sun firm on June profit, new storage push

SAN FRANCISCO: Network computer maker Sun Microsystems Inc. chief executive
Scott McNealy on Tuesday stood by a commitment to return to profit by mid-year
and said Sun was about to announce new storage systems.

"We are not changing our guidance. We are targeting to go profitable
again in the June quarter," he told an investment conference hosted by
Goldman Sachs in La Quinta, California.

Sun gave the same outlook on Jan. 18, when it reported a loss in its fiscal
second quarter, ended in December. Its fiscal year ends in June. "The good
thing about Sun is we took advantage of the bubble," McNealy said, adding
that Sun had built up its brand name and a $6 billion cash stockpile over the
last few years. A large part of Sun's customer base evaporated with the dot-com
downturn.

But McNealy said he could not predict Sun's gross profit margin, which is
revenues minus cost of goods, as a percentage of sales. "Don't bother
asking. I wish I knew. It's really hard," McNealy added.

Sun shares ended Tuesday trading down 25 cents, or 2.4 per cent, at $10.15 on
the Nasdaq. Sun, which opens an analyst conference in San Francisco on
Wednesday, will introduce a gamut of new data storage products, McNealy said.

The company known for computers which run corporate networks and the Internet
has been developing a storage strategy for the last couple of years and last
year struck an alliance with Hitachi Data Systems.

"Tomorrow is the next big broadside to those out there in the storage
business who think they can provide better storage for the Sun environment than
us," said McNealy. He said Sun systems based on Hitachi hardware had been
winning business usually taken by storage heavyweight EMC Corp.

EMC spokesman Greg Eden said Sun had shifted storage strategies a number of
times. "Sun has opted for the 'promise rather than deliver' approach to
storage before," he commented by e-mail.

(C) Reuters Limited.