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Sun Microsystem’s profits plunge by 73%

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Posted August 2, 2008 by admin in News

Sun’s shares sank more than 12 percent on the company’s worse-than-expected guidance, which indicated that the pressures that hurt Sun in the April-June period, its fiscal fourth quarter, are bleeding into the current quarter.

Sun, the world’s fourth-largest server maker, said before the market opened that it expects a “slight” sales decline in the fiscal first quarter, which ends in September, and indicated it likely wouldn’t turn a profit. Analysts surveyed by Thomson Financial were expecting flat sales and a profit of 11 cents per share in this quarter.

Goldman Sachs analysts David Bailey and Min Park said in a note to clients that Sun’s results supply “another piece of evidence that the problems the company faces have no short-term fixes, and we would continue to avoid the shares.”

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