Sun Microsystems posted slightly better-than-expected results Tuesday for the first quarter of new CEO Jonathan Schwartz’ tenure.

Excluding certain one-time expenses, Sun said its fiscal fourth-quarter loss deepened to $301 million, or $0.02 per share, from $54 million, or $0.02 per share, a year earlier. The per-share results were a penny better than expected by 18 analysts surveyed by Thomson Financial.

Sun’s revenue rose to $3.83 billion from $2.97 billion. That also beat the expectations of analysts, who were looking for $3.6 billion.

The results marked the first quarter under the helmsmanship of Mr. Schwartz, successor to Sun co-founder Scott McNealy (see Sun’s Scott McNealy Steps Aside). Mr. Schwartz’ appointment was announced at the same time the company posted disappointing third-quarter results.

Investors seemed happy with the recent financial report, which was announced after markets closed. Sun shares climbed $0.14, more than 3 percent, to $4.23 in after-hours trading.

The company’s actual bottom line included a variety of large adjustments related to restructuring, accounting for recent acquisitions, and charges related to compensation. Including those factors, the company had a net loss of $301 million, or $0.09, compared with net income of $50 million, or a penny per share, a year ago.

The new chief executive has started cutting costs and making the kind of tough decisions some observers said Mr. McNealy was loathe to do (see Sun Slashes Up to 5,000 Jobs). The recent financial report seemed to show Mr. Schwartz’ efficacy.

Signs of Improvement

“Revenue, bookings, and backlog are all up substantially—indicating we’re gaining traction, market confidence, and share,” Mr. Schwartz said in a release.

“In the former Sun stand-alone business, more than half of our 15 geographies had double-digit product revenue growth year-over-year,” CFO Michael Lehman added.

To be sure, some of the company’s recent servers, like Galaxy and Sun Fire, haven’t made as many sales as analysts had hoped (see Sun Adds Multicore Chips, Sun Debuts Galaxy Servers).

And research firm ValuEngine said in a report last week that Sun poses “unattractive risk and 5-year-annualized return.” The company issued a “hold” recommendation for Sun shares.

But Sun’s new servers could help it reach new markets (see Sun Serves Blades, Hybrids). Analysts from research firm UBS wrote in a recent report, “We believe the servers should provide Sun with improved momentum into [2007].”

Fiscal year 2007 seemed rosy to Mr. Lehman, who said, “We’re starting the new fiscal year with a healthy product backlog of over $1 billion.”

Contact the writer:ECubarrubia@RedHerring.com