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Strategies & Market Trends : Trade/Invest with Options Jerry a Point & Figure Chartist -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Olson who wrote (3353)	8/29/2001 6:29:52 PM
From: JustTradeEm	Respond to of 5893

No, not like Westy ..... I just trade the same handful in whichever direction they may be headed .... well, hopefully, that's what I do .... lol JB

To: Jerry Olson who wrote (3353)	8/30/2001 4:45:49 AM
From: 2MAR$	Respond to of 5893

Sun Says Downturn In Europe and Japan Steeper Than Expected Aug 30, 2001 -- Sun Microsystems Inc yesterday held its mid-quarter conference call with Wall Street analysts, preparing them for what will likely be a tougher first quarter than Sun had expected when it offered very meager guidance back on July 19, while closing fiscal 2001. Michael Lehman, Sun's chief financial officer, told Wall Street a story that is now very familiar. He said Sun enjoyed the boom times of the dot-com era when service providers, telecoms companies, and financial services firms experienced explosive growth that made them buy lots and lots of Sun servers. But he said those days are over now, and Sun is having to fight it out with IBM Corp, Hewlett-Packard Co, Compaq Computer Corp and a host of aggressive Wintel vendors to compete for a piece of the IT budgets at traditional enterprises. Lehman said that as far as Sun's sales during the first fiscal quarter are concerned, the market in the United States is a "touch behind" Sun's expectations from a few weeks ago, but that the real surprise is the weakening of sales in Europe and Japan. Only a month ago, Lehman said that business in the US had stabilized and that at its then-current cost structure Sun's break-even revenue level on a pro-forma basis was about $3.7bn. He said that Sun expected to come in above this level for its first quarter. But yesterday, Lehman pretty much squashed that idea. He did say that because of cost-cutting moves, operating expenses would be below the projected $1.6bn level Sun offered for guidance back at the end of July. As was the case back then, it is unclear if Sun will be able to report an actual profit on an as-reported basis with revenue off more than 15% compared to last year's first quarter. "This quarter has been quite challenging," he said, adding that the odds of Sun hitting that $3.7bn break-even point are slim to none, and that it would take an unusually strong September to make it happen based on the sales rate for the past eight weeks. Lehman was somewhat optimistic about Sun's future prospects as it rolls out its UltraSparc-III processors into workgroup and high-end servers in the coming months and faster versions of the chips in its Sun Blade 1000 workstations by the end of October (CI No 4,221). He said that some customers are waiting to see these new products before they buy, and that the product roll-outs would improve Sun's prospects. But he cautioned against being too optimistic because overall sales volumes in the Unix workstation and server markets are down considerably. "Our results are the effect of the overall demand out there," he said. "We are not losing a lot of deals, and we don't see anyone else doing any better. The competitive front is fierce, and it is tough out there. Every deal is being bid and re-bid and taken to the executive level." He said that the pricing environment is only a little tougher than in the last quarter - which just goes to show how reluctant companies are to compete on price in a soft economy until push comes to shove. The last thing any of the dominant Unix workstation and server vendors can afford is a price war. But the sad truth is that the Intel-based workstation and server markets, which are in the midst of intense price wars, will put pressure on Unix vendors and they will have to compete to win deals. Lehman did indicate that there has been no shift in Sun's sales by product mix, which is encouraging in that it would seem to indicate that Sun is repelling competition equally well at all levels on all product lines. Then again, it may also be viewed as an indication that Sun's competitors, working individually, are putting the same magnitude of pressure on Sun in each of the markets in which it competes. By Timothy Prickett Morgan timpm@computerwire.com Computergram International: Issue 4240, August 30, 2001 (C) Copyright 2001 ComputerWire. Not to be reproduced in whole or in part without written permission. -0- * end of story *