Sun Microsystems Reports Preliminary Results for Fourth Quarter Fiscal Year 2008

SANTA CLARA, Calif.–(EMWNews)–Sun Microsystems, Inc. (NASDAQ: JAVA) reported preliminary results today

for its fourth quarter of fiscal 2008, which ended June 30, 2008.

Sun expects to report revenues for the fourth quarter of fiscal 2008 in

the range of $3.725 to $3.800 billion, as compared with $3.835 billion

for the fourth quarter of fiscal 2007. Total gross margin as a percent

of revenues for the fourth quarter of fiscal 2008 is expected to be in

the range of 44 to 45 percent.

Sun anticipates reporting GAAP net income per diluted share for the

fourth quarter of fiscal 2008 in the range of $0.05 to $0.15. GAAP net

income per diluted share includes a restructuring charge of

approximately $100 million. On a non-GAAP basis, Sun expects to report

net income per diluted share in the range of $0.25 to $0.35. Non-GAAP

net income per diluted share excludes purchased in-process research and

development, amortization of acquisition-related intangibles,

stock-based compensation expense, restructuring charges and related

impairment of long-lived assets, gain or loss on equity investments,

settlement income and the related income tax effects of non-GAAP

exclusions.

“In these difficult economic times, we continue to see customers across

the world look to open software and hardware as a source of savings, and

feel Sun is well positioned with our most robust line ever of server,

storage, software and service offerings,” said

Jonathan Schwartz, CEO of Sun Microsystems.

Sun will report its complete fourth quarter and full fiscal year 2008

financial results on Friday, August 1, 2008. The company will host a

conference call on August 1, 2008 to review the complete financial

results beginning at 5:00 a.m. PT / 8:00 a.m. ET. The general public can

access the financial results and listen to the call via Sun’s Investor

Relations website at www.sun.com/investors.

About Sun Microsystems, Inc.

Sun Microsystems develops the technologies that power the global

marketplace. Guided by a singular vision — “The Network is the

Computer” — Sun drives network participation through shared innovation,

community development and open source leadership. Sun can be found in

more than 100 countries and on the Web at http://sun.com.

This press release contains forward-looking statements regarding the

future results and performance of Sun Microsystems, Inc., including

statements regarding Sun’s estimated revenues, total gross margin, GAAP

and non-GAAP net income per diluted share and restructuring charge for

the fourth quarter of fiscal 2008 and statements regarding industry

trends, customer preferences and Sun’s position. These forward-looking

statements involve risks and uncertainties and actual results could

differ materially from those predicted in any such forward-looking

statements. Sun’s preliminary results announced in this press release

are based on preliminary information about the fourth quarter of fiscal

2008 and are subject to revision. Although the quarter is now completed,

Sun is still in the early stages of its standard financial reporting

closing procedures. Accordingly, as Sun completes its normal quarter and

year-end closing and auditing processes, actual results could differ

materially from these preliminary estimates. Factors that could cause

Sun’s actual results to differ materially from those contained in such

forward-looking statements include: inaccurate data or assumptions;

unforeseen expenses; changes in estimates or judgments related to tax

liabilities; potential goodwill impairments; potential litigation, bad

debts or other contingencies; facts or circumstances affecting the

application of Sun’s critical accounting policies, including revenue

recognition; risks associated with developing, designing, manufacturing

and distributing new products; lack of success in technological

advancements; pricing pressures; lack of customer acceptance and

implementation of new products and technologies; the possibility of

errors or defects in new products; a material acquisition, restructuring

or other event that results in significant charges; competition; adverse

business conditions; failure to retain key employees; the cancellation

or delay of projects; Sun’s reliance on single-source suppliers; risks

associated with Sun’s ability to purchase a sufficient amount of

components to meet demand; inventory risks; risks associated with Sun’s

international customers and operations; delays in product development;

Sun’s dependence on significant customers and specific industries; and

Sun’s dependence on channel partners. Please also refer to Sun’s

periodic reports that are filed from time to time with the Securities

and Exchange Commission, including its Annual Report on Form 10-K for

the fiscal year ended June 30, 2007 and its Quarterly Reports on Form

10-Q for the fiscal quarters ended September 30, 2007, December 30, 2007

and March 30, 2008. Sun assumes no obligation to, and does not currently

intend to, update these forward-looking statements.

To supplement Sun’s preliminary financial results presented in

accordance with GAAP, Sun provides non-GAAP net income per diluted share

data. The presentation of this non-GAAP financial measure should be

considered in addition to Sun’s GAAP results and is not intended to be

considered in isolation or as a substitute for the financial information

prepared and presented in accordance with GAAP. Sun’s management

believes that this non-GAAP financial measure provides meaningful

supplemental information regarding its performance by excluding certain

gains, losses and charges that may not be indicative of Sun’s core

business operating results. Sun believes that both management and

investors benefit from referring to this non-GAAP financial measure in

assessing Sun’s performance. This non-GAAP financial measure also

facilitates comparisons to Sun’s historical performance and its

competitors’ operating results. Sun includes this non-GAAP financial

measure because management believes it is useful to investors in

allowing for greater transparency with respect to supplemental

information used by management in its financial and operational decision

making. Non-GAAP net income per diluted share ($0.25 to $0.35) is equal

to GAAP net income per diluted share ($0.05 to $0.15) as adjusted to

exclude purchased in-process research and development, amortization of

acquisition related intangibles, stock-based compensation expense,

restructuring charges and related impairment of long-lived assets, gain

or loss on equity investments, settlement income and the related income

tax effects of non-GAAP exclusions (an aggregate adjustment of $0.20 per

diluted share).

Sun, Sun Microsystems, the Sun logo, Java, and The Network Is The

Computer are trademarks or registered trademarks of Sun Microsystems,

Inc. or its subsidiaries in the United States and other countries.

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