Sun warns of lower earnings
Sun Microsystems warns that its earnings will come in below prior forecasts with sales down from the most recent quarter.
Sun said revenue for its fiscal fourth quarter ending June 30 should be in the range of $3.8 billion to $4 billion. Earnings, excluding extraordinary items, will be in the range of 2 to 4 cents a share, the company said.
A consensus of analysts polled by First Call had predicted revenue of $4.4 billion and earnings of 6 cents per share for the fourth quarter, which ends June 30. The company will announce fourth-quarter results on July 19.
Shares of Sun traded at $17.40 in after-hours activity on the Island ECN. Sun fell 8.8 percent to $18.67 in Tuesday's regular trading ahead of the news.
Not only has U.S. economic sluggishness continued, but demand in other parts of the world has weakened over the past six to seven weeks, Sun Chief Financial Officer Michael Lehman said in a conference call with analysts following the announcement.
"The demand in Europe has really tailed off," Lehman said. "That's really been in the news in this conference call."
A number of analysts expected Sun to lower its fourth-quarter forecast. Shares of the company fell 8 percent Tuesday ahead of its midquarter report.
Goldman Sachs analyst Laura Conigliaro cut her estimates for Sun in a research note released Tuesday morning. She now expects 12.8 percent growth for the calendar year, compared with the company's previous prediction of 15 percent growth.