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