Sun Microsystems came through for its investors once again Thursday, beating Street estimates by 2 cents a share by returning a profit of $275 million ($168m), or 33 cents a share, on sales of $3.12 billion in its first quarter. First Call consensus expected Sun to earn 31 cents a share in the quarter. In a sign of typical investor caution, Sun shares closed up only 1/32 to 89 13/32 ahead of the earnings report. The $3.12 billion in sales represents a 25 percent improvement compared to the year-ago period when it raked in $114 million, or 14 cents a share, on sales of $2.5 billion. In the quarter, Sun took a $3.5 million charge related to the acquisition of Star Division Corporation and certain assets and liabilities of Star Division Software-Entwicklung und Vertriebs GmbH. Due to the structure of this transaction, Sun also incurred an increase of $1.3 million to its income tax provision. Including those charges, Sun posted of $271.1 million, or 33 cents a share, in the quarter. "Our success in the first quarter came at the expense of our traditional competitors," said CEO Scott McNealy in a prepared release. ``We gained share in many of our key markets, especially in servers for the Internet and service providers. Many are talking about 'e-everything' strategies while we are delivering real solutions for the service-driven network. Sun is powering the 'Net." McNealy, clearly reveling in his company's outstanding performance, used the first-quarter earnings report as an opportunity to take some swipes at competitors such as Hewlett-Packard and IBM. "The public challenge to Sun by HP, IBM and others would be even more of a concern if we were fighting against new and improved strategies, but we're not," McNealy said. "If imitation is the highest form of flattery, we are 'very' flattered." Company officials said corporate customers downloaded nearly one million copies of its StarOffice suite in a little more than a month. Last quarter, Sun topped analysts' estimates, earning $395 million, or 48 cents a share, on sales of $3.51 billion. First Call consensus expects Sun to report a profit of $1.71 a share in fiscal 2000. Sun shares peaked at 99 7/16 earlier this month after trading at a 52-week low of 21 13/16 last October. Nineteen of the 23 analysts following the stock maintain either a "buy" or "strong buy" recommendation.