Commenting on some rather storm-damaged third quarter figures (see opposite), Sun Microsystems Inc chief financial officer Kevin Melia said Profitability was below the year-ago level due to gross margin declines that were partially offset by tightly controlled growth in operating expenses. The gross margin percentage declined from the prior-year quarter due to a heavier mix of upgrade shipments, as well as increased shipments of non-systems components such as memory and storage. We also experienced weakness in several European countries. However, our continuing commitment to control headcount and spending enabled us to increase turnover per employee above $300,000 for the first time, and reduce our operating expenses as a percentage of revenues. Sun says that its computer systems subsidiary, Sun Microsystems Computer Corp, shipped more than 90,000 Sparc processors during the quarter, 57,000 of which were systems, and the balance of which were upgrades and multiprocessors. SunSoft Inc, the company’s system software subsidiary, distributed 136,000 Solaris and Unix licences, 116,000 of which were Solaris 2. We achieved volume shipments of the Sparcstation 10 Model 41 systems, and continued to establish the Sparcstation 10 as the most successful new product family in Sun’s history, Melia commented. Through the third quarter, we have shipped nearly 45,000 Sparcstation 10’s. In addition, we shipped more than 13,000 of our low-cost MicroSparc-based desktop workstations, and we made our initial shipments of the new Sparccenter 2000 enterprise server products. Melia concluded, We have solid cost and asset management, and will continue to emphasise keeping the business lean, focused and financially strong, and noted that the company was due to launch those new machines and price cuts (CI No 2,152), late yesterday.
