Sun's finances are improving

But the loss is not as bad as market expectations, and less than the figure for the same period last year - $286m.

Sun's revenues have also improved, up to $2.63bn compared with $2.54bn for the first quarter in 2003.

Analysts gave the results a qualified approval, saying that while revenues growth was still slow, good efforts had been made to cut expenses.

Getting better

"They're still struggling to show growth, but they're moving (product) volumes and as long as they can maintain profitability Wall Street will probably view this as positive," said Pacific Crest Securities analyst Brent Bracelin.

In after-hours trading, Sun shares rose 2.5% after the publication of the trading report.

In April, Microsoft paid Sun $1.6bn to resolve a patent and competition dispute.

Sun had accused Microsoft of changing its popular Java programming software without its permission.