Sun lowers revenue targets for quarter

Sun Microsystems Inc. issued a warning Tuesday for the company's fourth quarter, saying it expects results for the period to fall below previous forecasts.

Sun, like many hardware vendors in the tech industry, has suffered from a slowing U.S. economy and, in particular, from reduced spending by Internet companies and service providers.

Sun now expects revenue for its fourth quarter, ending on June 30, to fall between US$3.8 billion and $4.0 billion, and its earnings per share to be between $0.02 per share and $0.04 per share. Analysts polled by Thomson Financial/First Call predicted Sun would pull $0.06 in the quarter.

Sun reported earnings of US$263 million for its third fiscal quarter, which ended in March. While the net income came in above analysts expectations, it fell 43 percent compared to the same quarter last year, reflecting a softening market for information technology. The Goldman Sachs Group Inc. reduced its 2002 forecast for Sun earlier in the day and also lowered its estimates for storage maker EMC Corp.

"We think both companies are in the midst of tough demand environments with no real evidence of a tangible turn," Goldman Sachs said in their report. "We think the weight of too many issues -- principally surrounding weakening European and possibly Asia/Pacific business in the midst of a major product transition for Sun -- has worn on the quarter."

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