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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Lynn who wrote (30412)	4/10/2000 9:08:00 AM
From: Lynn	Read Replies (2) \| Respond to of 64865

_Individual Investor_: "Look for a Slight Upside Surprise From Sun Microsystems" Analyst: David Peltier (4/10/00) Look for another strong quarter from Sun Microsystems (NASDAQ: SUNW - news) when the company releases results on Thursday, April 13. The continued build out of the internet infrastructure should be the primary catalyst of expanded revenues and profits. Right now the Street is looking for $0.23 per share. Whisper numbers have the company earnings a penny more. That looks on the mark, as the company has beaten estimates by exactly $0.01for four of the last five quarters. Per share profits of $0.25 or higher should help fuel a rally in the stock. Total sales should come in at just under $4 billion, 30% higher than the previous year. Our estimates are based on guidance offered by management at a mid-quarter conference call, which we highlighted in a previous update. The one soft spot appears to be in Japan, where Sun derives 10% of its revenue. The company is seeing it sales fall with a slightly weaker Japanese economy. This should not materially impact earnings, but will probably limit the upside surprise in the quarter to a penny. International sales, which count for 50% of sales, bears close watching. Any profit weakness in the core business could be masked by the company's venture capital gains. Like many other high tech outfits, Sun continually sells off sections of its equity stakes to help fatten profits. That trend should continue as the company recently added $200 million to its venture capital fund, doubling its original deposit. Sun is looking bring more of an international focus when expanding its portfolio of 15 holdings. The venture capital program is a perfect complement to Sun's ``iForce' program, which helps Internet start-ups get off the ground. The company's dominance in the server market is most apparent at the lowest end of the price range, and Sun is starting to forge relationships with these companies at an early stage, in hopes of garnering a larger chunk of business down the road. Sun is a leading technology company, and is one of the stocks that should help the entire Nasdaq rebound during this earnings season. Sun has weathered the recent sharp correction in high-tech issues, and we still feel confident that the stock will rise at least 30% from current levels before the year is through. Updated April 10, 2000 at $91.42 Recommended December 10, 1999 at $81.88 (The Magic 25 is a diversified portfolio of stocks that Individual Investor believes will outperform the market over the course of the year. In 1999 the Magic 25 portfolio was up 79.3%. On average the portfolio has risen 31.6%.) biz.yahoo.com Lynn