that earnings will miss by 50%.
The share lost in after market trading 10% !!!
SUN MICROSYSTEMS (SUNW) warned Thursday its fiscal third-quarter earnings will fall far short of Wall Street's forecast, citing weak U.S. economic conditions and a slowdown in information-technology spending.
During a conference call to provide a midquarter update to analysts and investors, the maker of servers and software said it now expects earnings of seven cents to nine cents a share for the quarter. A survey of analysts by First Call/Thomson Financial produced a mean earnings estimate of 15 cents a share for the period.
Michael Lehman, Sun's chief financial officer, said third-quarter revenue will grow in the 10% to 13% range. Lehman said gross margins are expected to be in the 45% range, down two or three points from the fiscal second quarter. He declined to give forecasts for the fourth quarter, saying that Sun can't provide a clear demand picture.
For the quarter ending March 31, Sun plans to invest "north of 20%" in research and development and is adding 1,500 to 2,000 new employees to certain parts of its sales and its enterprise units, said Lehman.
For the fourth quarter, however, Sun will hire fewer than 500 employees in those areas. Lehman said that the recessionary nature of the current U.S. economy is clearly having an impact on IT spending. Lehman added that Sun is instating another share repurchase program to buy back up to $1.5 billion of its stock in the open market.
During the regular session, Sun's shares bounced off a 52-week intraday low of $19.88 to rise $1.19, or 6%, to $20.81 on optimism that the company wouldn't lower estimates. However, following the call, in after-hours trading, the stock has dropped 10% to $18.64. The stock hit a 52-week high of $64.66 on Sept. 1.
Last month, when the company reported a 44% surge in fiscal second-quarter revenue to $5.12 billion, the company cautioned that revenue growth would slow over the next six months.
At that time, Lehman told analysts that revenue growth for the full year ending June would be "slightly lower" than earlier projections, coming in between 30% and 35% instead of "in the mid-30s." Since Sun's revenue grew 52% in the six months ended December, the company essentially projected that growth over the next two quarters would average no more than 18%.
The share lost in after market trading 10% !!!
SUN MICROSYSTEMS (SUNW) warned Thursday its fiscal third-quarter earnings will fall far short of Wall Street's forecast, citing weak U.S. economic conditions and a slowdown in information-technology spending.
During a conference call to provide a midquarter update to analysts and investors, the maker of servers and software said it now expects earnings of seven cents to nine cents a share for the quarter. A survey of analysts by First Call/Thomson Financial produced a mean earnings estimate of 15 cents a share for the period.
Michael Lehman, Sun's chief financial officer, said third-quarter revenue will grow in the 10% to 13% range. Lehman said gross margins are expected to be in the 45% range, down two or three points from the fiscal second quarter. He declined to give forecasts for the fourth quarter, saying that Sun can't provide a clear demand picture.
For the quarter ending March 31, Sun plans to invest "north of 20%" in research and development and is adding 1,500 to 2,000 new employees to certain parts of its sales and its enterprise units, said Lehman.
For the fourth quarter, however, Sun will hire fewer than 500 employees in those areas. Lehman said that the recessionary nature of the current U.S. economy is clearly having an impact on IT spending. Lehman added that Sun is instating another share repurchase program to buy back up to $1.5 billion of its stock in the open market.
During the regular session, Sun's shares bounced off a 52-week intraday low of $19.88 to rise $1.19, or 6%, to $20.81 on optimism that the company wouldn't lower estimates. However, following the call, in after-hours trading, the stock has dropped 10% to $18.64. The stock hit a 52-week high of $64.66 on Sept. 1.
Last month, when the company reported a 44% surge in fiscal second-quarter revenue to $5.12 billion, the company cautioned that revenue growth would slow over the next six months.
At that time, Lehman told analysts that revenue growth for the full year ending June would be "slightly lower" than earlier projections, coming in between 30% and 35% instead of "in the mid-30s." Since Sun's revenue grew 52% in the six months ended December, the company essentially projected that growth over the next two quarters would average no more than 18%.
