July 30 (Bloomberg) -- Sun Microsystems Inc., the world's fourth-largest maker of server computers, reported net income of $329 million, exceeding analysts' estimates, after it cut jobs and component prices fell. The shares jumped 12 percent.

Fourth-quarter earnings were 9 cents a share, compared with a loss of $301 million, or 9 cents, a year earlier, Santa Clara, California-based Sun said today in a statement. Analysts in a survey by Bloomberg had estimated earnings of 5 cents. Sales rose 18 percent to $3.84 billion in the period ended June 30.

Chief Executive Officer Jonathan Schwartz, who pledged to return Sun to profitability after taking over the company last year, exceeded his goal of a 4 percent operating margin in the quarter. Schwartz, 41, has cut 3,700 jobs and is aiming for a 10 percent operating margin in fiscal 2009. The fiscal year just ended marks Sun's first annual profit since 2001.

``He overdelivered,'' said Tim Ghriskey, chief investment officer at New York-based Solaris Asset Management, who oversees more than $1 billion and doesn't own Sun shares. ``It was a very good quarter for them and quite a surprise.''

Shares of Sun surged after the company said its fourth- quarter operating profit margin was 8.5 percent. The margin represents profit from the company's operations, excluding taxes and interest expenses, as a percentage of sales.

The stock rose as much as 60 cents to $5.49 in extended trading after the report. It had fallen 3 cents to $4.89 at 4 p.m. New York time in regular Nasdaq Stock Market trading. The shares have dropped 1.8 percent since April 2006, when Schwartz took over as CEO for co-founder Scott McNealy.

No Forecast

While Sun said it expects an 8 percent operating margin in the fourth quarter of fiscal 2008, the company declined to forecast sales or earnings. The company said it may not give quarterly predictions in the future.

``We will try to avoid quarterly guidance. It's not my favorite topic,'' Chief Financial Officer Michael Lehman said in an interview. ``It's appropriate to keep people focused on the full year.''

Lehman attributed the rising operating margin to lower costs for parts such as memory chips.

Sun, whose customers include EBay Inc., Frontier Airlines Holdings Inc. and Viacom Inc.'s Paramount Pictures, trails International Business Machines Corp., Hewlett-Packard Co. and Dell Inc. in sales of server computers. Companies rely on the machines to manage networks and Web sites.

Server Sales

Servers are Sun's main moneymaker, accounting for about 47 of its revenue in the fiscal year just ended. The storage business, bolstered by the $4.1 billion purchase of Storage Technology Corp. in 2005, represented about 17 percent of sales. Services accounted for the rest.

In the fourth quarter, Sun's server sales rose 2.3 percent to $1.85 billion, while storage revenue fell 10 percent to $639 million. Sales from customer support and other services gained 3 percent to $1.34 billion.

The company sent the earnings report through an Internet feed and as a U.S. Securities and Exchange Commission filing, before it released the results on PR Newswire. Sun has had talks with the SEC about releasing more financial information through blogs and Web feeds. The company argues that all investors should have access to the same information that's available on subscription wire services.

Some European companies, such as retailer Carrefour SA, already report their earnings online themselves, first or at the same time as wire releases.

To contact the reporter on this story: Rochelle Garner in San Francisco at rgarner4@bloomberg.net

Last Updated: July 30, 2007 19:44 EDT