Sun Microsystems (JAVA), the computer server maker, said Monday it expected to post a loss of 25 to 35 cents a share and a decline in sales for its most recent quarter and might have to take a charge related to a recent acquisition. For years, Wall Street customers have accounted for a large portion of Sun’s sales. With many of these customers disappearing while others have pulled back on technology spending, Sun has found itself in a difficult position, trying to move the newest models of hardware and software. Sun competes against companies like I.B.M. (IBM), Hewlett-Packard (HPQ) and Dell (DELL) in the server business.
The company, which plans to release full results on October 30. Sun said it expected to post revenue of $2.95 billion to $3.05 billion for the period, its first fiscal quarter, which ended Sept. 28. That is down from $3.22 billion a year earlier. Analysts had forecast revenue for the most recent quarter of $3.15 billion. Last November, Sun performed a one-for-four reverse stock split that pushed shares above $20. Since that time, Sun’s stock has been battered, closing Monday at $5.78 a share in regular trading.
October 15, 2008, Bernstein lowered IBM's (IBM) target to $110 from $134, EMC's (EMC) target to $12.50 from $15.50 and Sun Microsystems' (JAVA) target to $6 from $9 to reflect the economic outlook, strengthened and the credit crunch.
In the next day, The Register suggests that the downturn on the global stock markets may be good news for some financially-strapped IT vendors, as they may make the move to go private. One company that may consider going private is Sun Microsystems (JAVA), which, the Register says, is not spending enough time selling its products and building up its channels. Other companies that may look to go private are Novell (NOVL), Silicon Graphics (SGIC) and Cray (CRAY). If the companies don't go private, another suggestion is for them to be acquired.
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- theflyonthewall
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