Revenue fell 7.1 per cent to US$2.99bn compared with US$3.2bn for the first quarter of the previous year.
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.
Sun Microsystems slumps to US$1.68bn loss
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