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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: High-Tech East who wrote (8803)	10/5/2001 9:35:22 AM
From: J.T.	Read Replies (2) \| Respond to of 19219

For your eyes only. Let's see how market responds.: Sun Micro warns of wider loss Layoffs of 9% ordered; conference call pending By Emily Church & August Cole, CBS.MarketWatch.com Last Update: 9:30 AM ET Oct. 5, 2001 NEW YORK (CBS.MW) -- Network computer maker Sun Microsystems said it will report a quarterly operating loss with revenue falling short of expectations as the terrorist attacks of Sept. 11 made an already difficult business environment more challenging. Significantly, the company will cut 9 percent of its staff and shut some facilities after strenuously avoiding layoffs until now. The company disclosed the moves in conjunction with a conference call held with investors Friday morning. Shares of Sun (SUNW: news, chart, profile) were trading down 21 cents, or 2.2 percent, at $9.07 in pre-open trading. They ended up 29 cents at $9.29 in Thursday's regular session. Sun now forecasts a per-share loss of 5 to 7 cents a share for the fiscal first quarter ended Sept. 30, with revenue totalling in a range of $2.7 billion and $2.9 billion. Analysts, as polled by Thomson Financial/First Call, had been forecasting on average a loss of 4 cents a share. To cover costs of the layoffs, Sun will record a $500 million second-quarter charge. "Things were tough with the economy before, but now we are facing increasing uncertainties both in the U.S. and globally. To ensure the long-term health of the business, we are making structural changes to the capacity of our company," said CEO Scott McNealy in a statement. There was no target date given by management for Sun's return to profitability. "We intend to get the business profitable again as soon as possible," said McNealy. Analysts have been lowering their financial estimates for Sun's September quarter amid weakness in the information technology sector. Some have anticipated layoffs to counter the company's slowdown in sales. See full story of layoff expectations at Sun Analyst Toni Sacconaghi at Sanford Bernstein on Thursday said he expects Sun will report a loss in fiscal 2002 if the company didn't move to cut jobs. Sacconaghi said in a note to clients that recent field checks indicate that demand for Sun products remains "very weak" and that there is no expectation of a rebound through at least the end of calendar 2001. The analyst lowered his fiscal 2002 revenue estimate to $14.3 billion and expects the company to earn 10 cents a share for the full year - an estimate that takes into account "material" layoffs, on the order of 10 to 15 percent. In the past few days, PC makers Gateway (GTW: news, chart, profile) and Compaq Computer (CPQ: news, chart, profile) have warned that quarterly results will be worse than expected, each citing the post-Sept. 11 falloff in demand. See Gateway story. However, Dell Computer (DELL: news, chart, profile) affirmed on Thursday its revenue and earnings targets for the third quarter. Best Regards, J.T.