Sun cuts earnings, revenue targets

Sun Microsystems drastically slashed financial targets for the current quarter and announced a stock buy-back.

During a Thursday conference call with analysts, executives for the maker of servers and network software said they now expect the company to report earnings of 7 to 9 cents per share, or possibly less than half of what Wall Street expected. Analysts surveyed by First Call predicted a profit of 15 cents per share for Sun's fiscal third quarter, which ends in March.

The company now sees third-quarter revenue growth of 10 to 13 percent year-over-year, which translates into sales of $4.41 billion to $4.53 billion. First Call consensus was predicting revenue of $5.25 billion.

"Believe me, it's the U.S. economy," said Ed Zander, president and chief operating officer. "That's the major factor here."

Sun also approved a $1.5 billion stock buyback.

Shares of Sun traded at $20.68 in after-hours activity on the Island ECN, as the company's conference call began. Sun closed Thursday's regular trading at $20.81 ahead of the news.

More details to follow.>