Haaaaaaaallloooooooooo!!
Anybody out there?
Teleconference Briefing - Sun Microsystems Inc. (Nasdaq: SUNW)
10/23/00 4:39:00 PM
Source: PR Newswire
And Commerce One Inc. (Nasdaq: CMRC), to Forge Strategic Business Alliance To Strengthen Global E-Business
What: A joint conference call to discuss new strategic alliance between the two companies
When: Tuesday, October 24, 2000, 1:00 p.m. (PST), 4:00 p.m. (EST) Dial-in #: U.S., 1-800-288-9626 International, 612-332-0345
Who: Doug Kaewert, Vice President of Market Development, Sun Microsystems Inc. Mike Micucci, Vice President of Solutions Strategy, Commerce One Inc.
Why: This briefing will disclose Sun and Commerce One's global e-business alliance. With a shared vision for a customer-centric economy, Doug Kaewert and
Mike Micucci will outline the terms of the alliance, its industry significance and customer implications.
Contact: Meghan Shamon, Burson-Marsteller for Sun Microsystems Inc. meghan_shamon@sfo.bm.com 415-591-4101 Christine Coleman, The Horn Group for
Commerce One Inc. ccoleman@horngroup.com 415-905-4028
SOURCE Sun Microsystems, Inc.
The Sun Keeps Rising
Net Stock Trading Tips
Tues, 10/24/00-9:54 AM by Robert James
Is the NASDAQ’s annual September Slump officially over? If all the index’s constituents were all like Sun Microsystems (SUNW: news, msgs) it
certainly would be, as SUNW recorded net income for its first fiscal quarter of 2001 at 88% better than last quarter. At $510 million, this represents quarterly earnings of $0.30 per
share - double from the comparable quarter last year and $0.04 above expectations.
The increased demand for SUNW’s products resulted mainly from the continuing scramble in corporate America for equipment to manage and store Web traffic. Revenue soared
60% to $5.05 billion from $3.15 billion last quarter as customers snapped up high-end computers and data-storage equipment for managing Internet commerce and serving up
Web pages. SUNW’s revenues grew in all sectors of the globe, including Europe. That’s notable since high oil prices, fluctuating currency rates and a slowdown in corporate
spending have caused other companies to stumble in Europe these past months. The earnings increase is also noteworthy given the present industry-wide shortage of memory
components, causing DRAM prices to be bid up amid short supply and erode the company’s profit margins. Analysts say SUNW’s results derive largely from aggressive, “take no
prisoners” leadership and a sales force that is focused on delivering products on time.
These products consist mainly of SUNW’s server and storage products such as StarFire, Solaris and UltraSparc 3. Although competitors such as IBM (IBM: news, msgs),
Hewlett-Packard (HWP: news, msgs) and Compaq Computer (CPQ: news, msgs) have been trying to introduce similar products, none have made significant inroads in the
UNIX server market. SUNW seems to have a lock on the server market from the top down, bolstered by its recent $2 billion acquisition of Linux server-appliance maker Cobalt
Networks (COBT: news, msgs). As the PC business slows down, the server and data markets will probably be one of the last places that companies will curtail spending as
they continue to automate their internal processes and move onto the Internet.
Additionally, SUNW is continuing to introduce new, high-end products that will boost functionality. In early December, the company is scheduled to release "Full Moon," the code
name for SunCluster 3.0 software for sharing jobs across several servers. This is part of SUNW’s effort to allow customers to run their own software while freeing them from
worrying about the hardware it's running on. Clustering software, which shares computing jobs among a group of computers, has been one way to ensure that computing
services remain running and available to those who need them. While SUNW has been weak in this area so far, its new product will go head to head with offerings from CPQ,
Red Hat and Microsoft (MSFT: news, msgs). In addition to the new clustering software, SUNW is also working on a product called iChange, which lets companies manage large
numbers of servers that all share the same task. iChange lets administrators easily try out new software and spread updates to all the servers of a certain category. When these
two products start rolling off the lines, they could fuel continued growth and strong earnings.
There is no doubt that the stock is expensive at about $118 per share, which is 83.4 times revised fiscal 2001 [June] EPS estimates of $1.40. SUNW is also trading at about 2.5
times its sustainable projected growth rate over the next three to five years. However, with earnings next quarter projected at $0.26, analysts’ 12-month price target for SUNW
shares ranges from $135 - 150 per share. While that’s not quite as sexy an increase as the two or three-fold returns investors have been used to with start-up dot.coms - these
days, that’s a very respectable gain on a solid, low-risk investment.
Robert James is a freelance writer who holds an MBA in finance and works for a mid size manufacturing firm. For the past 3 years, he has been an avid trader of net stocks.
Author does not hold positions in any of the stocks mentioned in this article.
Ralf |
