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To: 2MAR$ who wrote (60)	5/29/2001 7:34:19 PM
From: 2MAR$	Respond to of 208838

Upon Warning Sun Micro blames Europe for quarter's sales drop (adds detail from conference call, analyst comment, stock price update, previous dateline PALO ALTO) By Peter Henderson SAN FRANCISCO, May 29 (Reuters) - Network computer maker Sun Microsystems Inc.<SUNW.O> cut its current quarter profit forecast on Tuesday and said sales would be 10 percent or more below Wall Street estimates due to economic weakness in Europe. Although Sun blamed the undershoot on more general economic conditions, some analysts questioned the company's competitive position and pricing power and its stock continued a week-long slide in after-hours trade in response to the warning. "The news is Europe. The surprise is Europe," Chief Financial Officer Michael Lehman told a conference call. U.S. demand had failed to meet expectations but was "more stable over the past few months" and patches of Asia-Pacific were also soft in the fiscal fourth quarter ending in June, he said. Revenue growth had accelerated to 60 percent in the quarter ending in September 2000, before the economic weakness spilled through the company, capping Sun's rise in sales to 2 percent in the third quarter. "This is still principally demand, macroeconomic driven," Lehman said, cutting Sun's fourth quarter sales forecast to $3.8-4.0 billion, compared with the $4.4 billion consensus estimate of analysts polled by Thomson Financial/First Call. Sun estimated that per-share earnings on a pro forma operating basis would be 2 to 4 cents, below the average Wall Street forecast for earnings of 6 cents on that basis. Including charges, net results for the quarter would be a touch above break even, Lehman said. Sun shares, which have fallen for five straight sessions, dropped to $17.98 in after-hours trading on Instinet from a Nasdaq close of $18.67. The stock had rallied from early April to last week, in line with a broader recovery in technology stocks, but is still down nearly 33 percent since the start of the year. As a result, Sun has underperformed the Standard & Poor's 500 index by about 30 percent over that period, as it has repeatedly cut revenue forecasts and blamed a slowdown in corporate investment in information technology. "You are hearing that Europe is softening from other companies, so that is legitimate, but I hear the gray market for Sun servers is also hurting them," said Ned Klingelhofer, portfolio manager of the tech-heavy San Francisco Sentry Investment Group, which does not own shares in the company. Technology companies that have sold to dot-coms would find it difficult to return to historic growth rates, since many of their customers have failed, he said. "Without a doubt it is a challenging environment out there," Lehman said. But he said major companies were still building out their networks despite continued weakness in telecommunications and some financial industry firms. "Being in the Internet is a good thing and will continue to be a good thing going forward," he said. He generally declined to answer repeated questions from financial analysts on whether competitors were taking bites out of Sun's market, which would defy Sun's repeated claims that it was poised to gain market share in tough times. But he made one comment on International Business Machines Corp <IBM.N>: "They may be doing better than they did in the past, but it doesn't mean they are gaining share on us. We don't see it and we don't feel it." Supplies of Sun's new UltraSPARC III microchips are also not so tight as to constrain sales, Lehman said. Lehman forecast that Sun's gross profit margin would probably be near the fiscal third quarter's 41.6 percent, rather than up slightly, as he had forecast in April. Sun's long-term goal is to have its gross margin --sales minus the cost of goods sold as a percentage of revenues-- in the high 40s. Sun had said in April that fourth-quarter would be up slightly from the third quarter's $4.1 billion and that pro forma earnings per share would be flat or slightly down from the third quarter's 8 cents per share. ((Peter Henderson, San Francisco Bureau 415 677-2578 peter.henderson@reuters.com)) REUTERS * end of story

To: 2MAR$ who wrote (60)	6/12/2001 8:09:37 AM
From: 2MAR$	Read Replies (1) \| Respond to of 208838

AFFX 10pt sell-off $30) cuts 2Q guidance;sees 'sporadic' business next 2-3 Qtrs SANTA CLARA, Calif., June 11 /PRNewswire/ -- Affymetrix, Inc., (Nasdaq: AFFX) today announced that it expects revenues for the second quarter of 2001 to be in the range of $44 to $50 million including $3-$4 million in revenue from Perlegen Sciences, Inc. The revenue shortfall relative to recent analyst expectations is due to lower than anticipated orders for the Company's GeneChip(R) product line and a further decline in the spotted array instrumentation marketplace. Although the Company is managing expenses, it is not reducing R&D and infrastructure investments in a manner that would be harmful to its long-term opportunity. As a result, the Company expects to report a net loss for the quarter of $4 to $7 million, excluding non-cash, acquisition-related charges. The Company believes multiple market factors stemming from the current economic climate are contributing to the unanticipated weakness in orders, making it increasingly difficult for the Company to predict its financial performance with certainty at this time. The Company does not expect further weakness in its overall business, but believes that it could be sporadic for at least the next two to three quarters. Affymetrix will provide further updates when it reports its actual second quarter financial results. "Affymetrix has created a new industry and has grown rapidly over the past few years. The nascent state of our market combined with variable economic conditions and rapidly changing dynamics affecting our largest customers have made it challenging to accurately forecast growth," stated Stephen P.A. Fodor, Ph.D. Chairman and CEO of Affymetrix. "Despite the current slowdown, our customers increasingly tell us that GeneChip technology is rapidly becoming an indispensable tool for scientific discovery as well as drug development. Thus, we remain highly optimistic about our longer-term financial prospects," concluded Fodor. The Company's current financial performance appears to be principally due to business uncertainties impacting the pharmaceutical industry, sporadic ordering patterns from a few of its large customers and a continued decline in the spotted array marketplace. In contrast, these factors do not appear to be affecting growth of the Company's GeneChip product line in the academic and biotech market segments. Industry specific factors such as consolidation trends appear to be impacting decision making by pharmaceutical companies, leading to fluctuations in customer ordering patterns and management of their inventory levels. In addition, the Company's murine array replacement program appears to be having a greater impact than anticipated on the initiation of new array-based studies. Performance of the Company's spotted array product line is consistent with a continued shift in user preferences away from do-it-yourself arrays to pre-synthesized arrays. Investors may listen to Affymetrix' management discuss this announcement and its financial implications by dialing domestic: 800-248-9412, international: 212-896-6082 on June 11, from 2:15 - 3:00 p.m. PT. A replay of this call will be available until 4:00 p.m. PT on June 15 at the following numbers: domestic: 800-633-8284, international: 858-812-6440, reservation number: 19111359. To access a Webcast of the conference call go to www.affymetrix.com/about/index.html, then click on "Investor Information." Affymetrix is a leader in developing and commercializing systems to acquire, analyze and manage complex genetic information in order to improve the quality of life. Affymetrix customers include pharmaceutical, biotechnology, agrochemical, diagnostics and consumer products companies as well as academic, government and other non-profit research institutes. The Company's GeneChip(R) system consists of disposable DNA probe arrays containing gene sequences on a chip, reagents for use with the probe arrays, a scanner, and other instruments to process the probe arrays and software to analyze and manage genetic information. The Company's spotted array system enables individual researchers to create and analyze custom microarrays on an easy to use platform. Additional information on Affymetrix and GeneChip array technology can be found at www.affymetrix.com. This announcement contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act as amended, including statements regarding Affymetrix' "expectations," "beliefs," "hopes," "intentions," "strategies" or the like. Such statements are subject to risks and uncertainties that could cause actual results to differ materially for Affymetrix from the forward-looking statements in this release. Such risks and uncertainties include, but are not limited to, the amount of sales completed during the remainder of the quarter, any unforeseen expenses incurred by the Company during the remainder of the quarter, any accounting adjustments made during the close of the quarter, uncertainties related to the impact of the mouse genome array replacement program, uncertainties relating to business and economic conditions in the industry, global economic conditions, changes in customer ordering patterns and variations in customer demand for products in various geographic regions, financial pressures affecting the rate at which the Company's technology is being adopted, uncertainties relating to technological approaches, product development, manufacturing, market acceptance, uncertainties related to cost and pricing of Affymetrix products, dependence on collaborative partners, uncertainties relating to sole source suppliers, competition, risks relating to intellectual property of others and the uncertainties of patent protection and litigation. These and other risk factors are discussed in Affymetrix' Form 10-K for the year ended December 31, 2000 and other SEC reports, including its Quarterly Reports on Form 10-Q for subsequent quarterly periods. Affymetrix expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Affymetrix' expectations with regard thereto or any change in events, conditions, or circumstances on which any such statements are based. Affymetrix, GeneChip and the Affymetrix logo are registered trademarks used by Affymetrix, Inc. SOURCE Affymetrix, Inc. -0- 06/11/2001 /CONTACT: Edward M. Hurwitz, Senior Vice President and Chief Financial Officer, 408-731-5000, or Anne Bowdidge, Director of Investor Relations, 408-731-5925, both of Affymetrix, Inc./ /Web site: affymetrix.com (AFFX) CO: Affymetrix, Inc.