BOSTON, USA: Computer server maker Sun Microsystems Inc reported a wider quarterly loss as sales fell because of lower technology spending and uncertainty over the company's future.

Analysts said Sun's business was hurt in the last few weeks of the quarter by news that it was in talks to be acquired by IBM, prompting some customers to hold off on making purchases until they knew the outcome.

Oracle Corp later swooped in and agreed to buy Sun for more than $7 billion, a deal that was announced April 2.

Revenue fell 20 per cent to $2.61 billion in Sun's fiscal third quarter ended March 29, compared with the average analyst forecast of $2.85 billion, according to Reuters Estimates.

Businesses were hesitant to buy Sun's computers out of concern that it might not be around to service that equipment if the unprofitable company failed to sell itself, analysts said.

"There was probably some pressure from the IBM saga that impacted the top line," said Cross Research analyst Shannon Cross. "It would have made it hard to close the quarter."

Excluding restructuring charges and related impairment of long-lived assets, Sun lost 21 cents per share in the quarter, compared with the loss of 19 cents a share expected by analysts, according to Reuters Estimates.

Computer sales dropped 29 per cent to $1 billion, while storage equipment sales fell 20 percent to $425 million.

Software sales rose 27 per cent to $187 million, while services revenue fell 13 per cent to $1.1 billion.

Gross margin shrank 2.2 percentage points from a year earlier to 42.7 per cent.

Sun reported a net loss of $201 million, or 27 cents per share, versus a year-earlier loss of $34 million, or 4 cents.

The shares of the Santa Clara, California-based company were quoted at $9.14 in extended trade, down slightly from their Nasdaq close of $9.16.

Shares of Redwood City, California-based Oracle were quoted at $19.66 in extended trade, down from their Nasdaq close of $19.74.

Oracle spokeswoman Deborah Hellinger declined comment on Sun's results. The company is not holding a conference call with analysts.