Sun Microsystems slumps to $1.68bn loss

Global financial crisis has knock-on effect on server supplier

The global financial crisis has harmed Sun

Sun Microsystems has posted a first quarter net loss of $1.68bn (£1.04bn), compared to an $89m (£54.8m) profit in the same period last year, as the supplier feels the bite of the global financial crisis

Revenue fell 7.1 per cent to $2.99bn (£1.84bn) compared with $3.2bn (£1.97bn) for the first quarter of the previous year.

Profit was hit by a $1.45bn write-down of goodwill - believed to be due to a fall in the valuation of subsidiary StorageTek, acquired for $4.1bn in 2005.

"Although we saw another quarter of growth in our Solaris-based Chip Multi-Threading and Open Storage systems, the economic downturn continued to weigh on our customers, especially those that contribute to our traditional high-end businesses," said Sun chief executive Jonathan Schwartz.

The company competes with IBM, HP and Dell in the server systems market, where many of the customers are financial services firms.