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

To: E_K_S who wrote (41535)	2/22/2001 8:31:17 PM
From: E_K_S	Read Replies (2) \| Respond to of 64865

Here is a good over view of the CC: (http://www.techweb.com/wire/finance/story/INV20010222S0011) "...Sun Bosses Trim Outlook (02/22/01, 6:46 p.m. ET) By Ken Schachter, TechWeb Finance Sun Microsystems Inc. says the company is a victim of the same domestic economic malaise that has gripped other technology businesses. Thursday, Sun (stock: SUNW) executives said the company's third-quarter revenue would only increase 10-15 percent compared to the 2000 quarter, considerably below the 31 percent growth rate expected by analysts surveyed by First Call/Thomson Financial. Company forecasts now call for third-quarter net income to come in at 7-9 cents per share compared to the analysts' consensus estimate of 15 cents. Sun president Ed Zander cited a "dramatic drop off in capital spending" in the U.S. market, including in the corporate sector. "It's the economy, pure and simple," said Zander, who added that the sudden slide in U.S. corporate orders was startling. Foreign orders remain in line, but U.S. orders—representing about half of Sun's business—are roughly flat for the third quarter, executives said. The company endorsed earlier estimates of a long-term growth rate of 20-35 percent once the U.S. economy recovers, but executives declined to say when that growth rate would resume and balked at providing guidance for the fourth quarter. On Thursday, shares of Sun (stock: SUNW) gained 1 3/16, or 6.05 percent, to 20 13/16 after coming under pressure earlier in the week amid widespread expectations that it would issue lower guidance. In after-hours trading, Sun shares surrendered their earlier gains, sinking to 18 13/16. Barry Hyman, chief investment strategist at Weatherly Securities, said the expectation of lowered guidance was largely built into Sun's stock price. "The market needs a nice catalyst, but its hard to believe that they'll come out with a surprisingly positive story," he said. Although the sales have slowed, executives said that the company was picking up market share at the expense of competitors and had passed IBM Corp. (stock: IBM) in the December quarter to become the No. 1 server company, according to Dataquest figures. Also encouraging is the assertion that sales of the new Ultrasparc III server remain vigorous and that chips for the box are in short supply, Zander said. But two products that use the Sun Ultrasparc III microprocessor still aren't shipping in volume. In December, Sun confirmed a one-month delay in the Sun Blade workstation and an undeclared delay in the UltraSparc III-based Sun Fire 280 R server. Thursday, a Sun salesperson said the Sun Blade's lead time is still between a month and a month and a half, and there was still no date when the Sun Fire would be shipped. "It doesn't have a lead time," the sales official said of the Sun Fire 280R. "All I can say is just to keep checking back." Sun's iPlanet software venture also has shown growth, the company said. IPlanet, the alliance between Sun and the Netscape division of AOL Time Warner Inc. (stock: AOL), makes infrastructure software for running and managing e-commerce applications. Despite the failures of many consumer-focused dot-coms, industry analysts expect significant growth in the market for business-to-business applications and the platforms that run them. Chief financial officer Mike Lehman said research and development spending would increase by more than 20 percent in the third quarter to maintain an edge over rivals, but general and administrative costs would be cut. Hiring will slow from between 1,500 to 2,000 employees in the third quarter to fewer than 500 in the fourth quarter, Lehman said. Lehman also announced an additional $1.5 billion stock buyback plan, reflecting the board's view that the shares are undervalued. Merrill Lynch analyst Thomas Kraemer on Wednesday issued a research note cutting his rating on Sun, Palo Alto, Calif., from "accumulate" to "neutral," citing a backup in the company's channel inventories. ============================================================ EKS