Sun shares slammed on news of expected Q1 loss
- 22 July, 2002 08:00
Shares of Sun Microsystems Inc. plummeted on Friday as investors reacted to news that the company expects to post a loss in its first fiscal quarter of 2003.
Sun's stock (SUNW) on the Nasdaq dropped almost 27 percent Friday to close at US$4.25, a new 52-week low. Sun reported earnings per share of $0.01 for its fourth quarter on Thursday, but said that it expects to post a loss in its first quarter of 2003, ending Sept. 30. [See "UPDATE - Sun squeezes profit out of fourth quarter," July 18.]Sun reported strong sales of its lower-end one- and two-processor servers in the fourth quarter, and was able to meet analysts' earnings expectations. The company posted its first net gain in four quarters, including charges, but warned that its move into the black would be short-lived.
Sun executives said the company will likely post a "slight loss" in the first quarter of 2003, during a conference call Thursday after the results were announced. Overall, the company said it expected to earn between $0.10 and $0.15 per share for fiscal 2003.
While the U.S. showed an uptick in sales for Sun in the quarter, weak Asian and European markets continue to make hardware sales hard to come by. Sun did say that customers are beginning to plot out large-scale server and storage purchases, but that finalized deals are not coming through just yet.