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To: Don Green who wrote (78154)	8/29/2001 6:04:37 PM
From: Don Green	Read Replies (1) \| Respond to of 93625

Sun Microsystems says losses likely this quarter SAN JOSE, Calif. (AP) -- Network computing giant Sun Microsystems Inc. said Wednesday that it probably will lose money this quarter because demand for its products in Europe and Japan has been softer than expected. Sun had said last month it needed to take in about $3.7 billion in revenue in its fiscal first quarter to break even. But hitting that mark ``would be a real stretch,'' Sun's chief financial officer, Michael Lehman, said in a conference call with financial analysts. ``It will take a very large month of September in terms of demand for us to hit the break-even point,'' Lehman said. ``At this stage, I would not count on that happening.'' Lehman would not provide more precise estimates, ``given how uncertain things have been in the last few months.'' Analysts were expecting Sun to earn 2 cents a share this quarter, excluding one-time charges, on revenue of $3.8 billion, according to Thomson Financial/First Call. In the comparable period last year, Sun's revenue was $5 billion. Sun shares fell 13 cents to $13.43 in heavy trading on the Nasdaq Stock Market before the company issued its update. In after-hours trading, the stock was down to $13. As a leading maker of servers, network software and high-end workstations, Palo Alto-based Sun has been hit hard by the high-tech slump. Lehman said recent sales in the United States have been about what the company expected, but Europe in Japan were worse than forecast. Still, Lehman said he was confident in the company's long-term health, pointing to the company's cash reserves of $6 billion. He said Sun was willing to sacrifice its near-term results somewhat to keep research and development spending high. Though analysts had speculated that Sun might be close to imposing layoffs on its work force of more than 43,000, Lehman said the company was still hiring in key areas. In July, the company said it would ask 2 percent of its workers, or more than 800 people, to find new jobs in the company. Those who could not, or would not, would have to leave. Lehman said Wednesday the company will end this quarter with 500 fewer people than it had at the start. Last week, Sun asked all employees with unused vacation time to take five of those days off by year's end to cut costs.