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

To: Charles Tutt who wrote (42565)	3/29/2001 6:33:41 PM
From: Haim R. Branisteanu	Read Replies (2) \| Respond to of 64865

Talking down the economy so that from very depressed levels the market should recover just in time for the next elections and take the congress. Simple old dirty tricks of politicians Haim

To: Charles Tutt who wrote (42565)	3/29/2001 9:17:56 PM
From: DiViT	Read Replies (2) \| Respond to of 64865

Analysts see further warnings for Sun By Bloomberg News March 29, 2001, 3:45 p.m. PT NEW YORK--Sun Microsystems may cut its sales forecast for the second time this year, perhaps before the maker of server computers posts fiscal third-quarter results next month, analysts say. Bear Stearns' Andy Neff reduced his profit and sales forecasts Thursday for Sun for the fourth time in three months, citing weakening demand for its servers, storage gear and software in a slowing U.S. economy. Customers like General Motors and Applied Materials snapped up Sun's wares in 2000 as business on the Internet surged, pushing sales growth to 35 percent or more in the last four quarters. Now, many of those same customers are holding back as their own sales wane. "There's no doubt that business is slowing down" for Sun, said Sunil Reddy, a fund manager at Fifth Third Bancorp in Cincinnati, which owns 1.2 million of the company's shares. Customers "have just frozen. They're waiting for the economic winds to shift." Sun shares plunged 70 percent in the past 12 months, while IBM, a large server maker that also sells other computer-related products, slid 20 percent. Palo Alto, Calif.-based Sun sliced its revenue forecast last month, saying sales in the fiscal third quarter, which ends this month, will rise 10 percent to 13 percent from a year ago. Earnings will be 7 cents to 9 cents a share, about half the average 15 cents analysts had expected, according to First Call. JNI, a San Diego company that makes computer data-storage adapters based on Sun products, cut its sales forecast Wednesday, citing weakness in the Sun server marketplace. JNI shares on Thursday tumbled as much as 19 percent. "This underscores our belief that the business is weak and that the risk of preannouncement is increasing" for Sun, Merrill Lynch analyst Thomas Kraemer wrote in a report. Kraemer last month lowered his Sun rating to near-term "neutral" from "accumulate," after reducing it from "buy" in December. Eight analysts have trimmed earnings predictions for this fiscal year in the past month, according to First Call. The U.S. economy grew at the slowest pace in 5.5 years in 2000's fourth quarter, and after-tax corporate profits fell for the first time since 1998. Computer-related stalwarts like Intel and Oracle also have cut expectations. Sun is facing more competition from rivals like IBM and Hewlett-Packard, analysts said. As it overhauls its lineup of servers and workstations this year, one misstep may give other manufacturers a boost. "Sun faces a tough economic environment, difficult (comparisons against last year), a more competitive product threat from IBM and HP, and is in the midst of a product transition," Bear Stearns' Neff wrote in his note to clients. Neff cut his third-quarter earnings estimate to 3 cents from 8 cents a share, and his sales estimate to $4.1 billion from $4.5 billion. He also took 10 cents off his profit target for the full fiscal year and 20 cents off for fiscal 2002. It's possible Sun will "guide down" expectations before releasing earnings on April 19, he said. Investors said that while it's useful to see ratings cuts and estimates as a barometer for current business conditions, analysts often react to the same data at different times and don't offer enough insight into future growth. "They've done the best job they can, (although) we don't rely heavily on the analysts," said Nicholas Jones, a portfolio manager at Ashland Management in New York, which owns about 1 million Sun shares. Though investors fret over the same issues Kraemer and Neff raise, they say Sun isn't losing market share to rivals yet and that new products based on its latest UltraSparc III chips seem promising. "I wish people would take a little longer-term perspective," Fifth Third's Reddy said. "Everybody wants to be ahead of each other in terms of lowering their numbers." news.cnet.com