Sun Micro sags after warning
Quarterly sales to be at low end of projections
By Mike Tarsala, CBS.MarketWatch.com
Last Update: 11:05 AM ET Aug. 30, 2002
[banks and brokers make up 25% of Sun's business
I regard Sun as a key leading indicator on IT spending
they make the big Unix server boxes
what Sun is to IT spending, Siebel is to corporate SW spending
both are in serious, very serious decline still
recovery? what recovery?
only thing recovering is the the funding of PPTeam actions]
PALO ALTO, Calif. (CBS.MW) -- Shares of Sun Microsystems moved lower Friday as the most actively traded U.S. issue, a day after the company issued a sales forecast that shed doubt that a tech recovery is in the works.
Sun CFO Steve McGowan said Sun's 2003 first-quarter revenue was likely to come in at the low end of a range of 10 percent to 15 percent less than the $3.4 billion the company reported in its 2002 fourth quarter. McGowan said Sun (SUNW: news, chart, profile) was seeing "no change in the IT (spending) environment."
McGowan added that there were also "some signs of worsening" in the market for spending on high-ticket technology equipment -- the kind that Sun sells.
Sun's shares dipped 5 cents to $3.80, as more than 35 million shares changed hands in the first 90 minutes of Nasdaq trading.
Sun officials did not lower the company's earnings estimates, and reiterated they expect to report a slight loss for the quarter. Analysts surveyed by Thomson Financial/First Call are forecasting Sun to lose 1 cent a share.
McGowan left open the possibility that revenue might improve, saying that the current quarter is historically back-ended, with many deals closing at the last minute.
Several analysts had previously said they believed Sun would not take down its estimates for the quarter, but remained cautious about what the company would say about the market for information technology spending. See full story.
McGowan said that Sun would consider new cost-structure alignment plans after determining how the current quarter pans out. The company has already made plans to cut 1,000 jobs by the end of the year.
Mike Tarsala is a San Francisco-based reporter for CBS.MarketWatch.com. |
