Top 10 IT vendors losing money

Burning money as they go

It's no surprise that some IT vendors have posted losses amid one of the harshest downturns in decades, but the scale of the losses in some cases is truly eye-watering.

Here we list the biggest losers to date. All results are those reported for the three months to 31 March 2009 unless otherwise stated.

Sun Microsystems – £132m ($201m)
Currently in the process of being acquired by software giant Oracle for about £4.9bn, Sun’s precarious financial position was affirmed when it posted a loss of £132m for the quarter ended 29 March 2009, significantly worse than the £22m deficit posted in the year-ago quarter. Server sales, which represent up to half of Sun’s entire revenue, were particularly badly affected as large companies scaled back on investment. (Fiscal quarter ending 29 March 2009)

SanDisk – £137m ($208m)
Portable storage specialist SanDisk attributed a £137m first-quarter loss to restructuring costs as a result of its joint manufacturing venture with Toshiba, and a 69 per cent fall in the average per-MB selling price of its flash memory products compared to the first quarter of 2008. The company maintains that demand for additional storage in mobile handsets and other electronic devices was better than expected, despite revenue falling 29 per cent to £388m year on year.

Symantec – £164m ($249m)
Symantec’s poor results were something of a surprise, given its focus on what is still considered to be a booming market for security software. But the company has lost sales to rival security companies such as McAfee and struggled to get some business customers to commit to long-term support and maintenance contracts because of budgetary constraints. It also took a £272m ($413m) non-cash goodwill impairment charge in the quarter. (Fiscal quarter ending 3 April 2009)

Sony Ericsson – £263m (€293m)
Sales of new mobile phones have slumped as businesses and consumers tighten their belts, leaving handset makers facing decreasing revenue. Arch rival Nokia has so far stayed in the black, but joint venture Sony Ericsson saw its quarterly deficit hit £263m, reflecting similar declines at Motorola and other handset makers.

AMD – £275m ($416m)
AMD was a victim of an abrupt slowdown in demand for semiconductors as computer and other electronic device makers exhaust surplus stock and rein in spending on new components. AMD reported a net loss of £275m, 27.9 per cent down on the £242m loss reported in the first quarter of 2008.

Nortel - £334m ($507m)
A dip in new infrastructure equipment spending by the world’s telcos is also partially responsible for Nortel’s woes. The company’s decision to file for bankruptcy in January this year had a predictable effect on its already declining appeal to buyers – revenue decreased 37 per cent year on year, contributing to an overall quarterly shortfall of £334m.

Alcatel-Lucent – £355m (€402m)
Telecommunications specialist Alcatel-Lucent, which supplies both equipment and chief executives to BT (current chief Ben Verwaayen held the same post at the telco previously), reported a net loss of £355m for the first quarter, its tenth sequential quarterly deficit. Verwaayen has outlined plans to cut the company's expenses by £1.8bn by 2011 in a bid to return to profit, shedding up to 17,500 jobs in the process.

STMicroelectronics – £358m ($541m)
As Europe’s largest semiconductor manufacturer, chips made by STMicroelectronics find their way into everything from computers to mobile phones. Like its rivals, the company blamed a fall in demand for silicon from both handset makers and computer manufacturers for its losses. (Fiscal quarter ending 28 March 2009)

Deutsche Telekom (T-Mobile) – £978m, €1.1bn
The German telco laid blame for its £1bn net loss squarely at the door of T-Mobile, after being forced to write down (re-evaluate) £1.61bn worth of its UK subsidiary’s assets due to intense market competition, the currency depreciation of sterling, and general economic conditions. Lower revenue from reduced roaming tariffs enforced by EC regulation also took its toll on Deutsche Telekom’s pan-European operations.

Toshiba – £1.26bn, ¥184bn
Another Japanese manufacturing giant down on its luck finished a bad year with a net quarterly loss of £1.26bn. Net loss over the full 12 months was £2.4bn. Toshiba makes everything from laptops and hard disks to digital projectors and RAM chips for the UK market. Sales were particularly hard hit in the US and Europe and even previously healthy markets in Asia saw a slower rate of financial return.