Sun and Google may have announced last month their upcoming collaboration, but that didn't save Sun's share price yesterday as it posted the results of the first quarter of its fiscal year yeterday.

"We are beginning to fire on all cylinders," chairman and CEO Scott McNealy gushed, as the results were announced. But those cylinders proved insufficient to help Sun replicate the $27M profit that Sun posted for this same quarter last year. This time the quarter ended in a loss of $123M.

In a written statement, McNealy said he's "confident in Sun's product strategy" as the company integrates the operations of its two largest acquisitions of the year, StorageTek and SeeBeyond. But Sun's share price dipped right away.

Following its usual practice, Sun did not release an earnings or sales forecast for the fiscal second quarter.

So far as Java is concerned, the quarter included some very upbeat news: the number of Sun Java Enterprise System subscribers climbed 55% sequentially in Q1 to 957,000 subscribers, an increase of over 337,000 subscribers. Of these 957,000 subscribers,  429,000 are JES Suite subscribers.

"We are approaching the magic one million mark," McNealy noted, in reference to the JES subscriber increase.

In a post-earning conference call with analysts, McNealy said "Clearly the numbers are looking nice." But McNealy, who owns 2.2% of Sun's shares, will not have been surprised by the reaction of the markets, which reflected the latest disappointment  - after repeated promises from McNealy for an imminent turnaround. Sun shares closed at $3.85, down 15 cents (3.75%). In the extended session, they lost another 4 cents.