Sun Microsystems issued warnings last week for its fiscal fourth quarter, saying slowing demand for its products among European customers means financial results for the period will fall below previous forecasts.
Sun has also been hurt by the slowing US economy and, in particular, by reduced spending among Internet companies and service providers. "Demand in Europe has really tailed off more than we thought it would," said Michael Lehman, vice president and chief financial officer at Sun.
Research group Goldman Sachs reduced its 2002 financial forecast for Sun, and also lowered its expectations for storage maker EMC. "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," said analyst Laura Conigliaro.
Sun now expects revenue for its fourth quarter, ending June 30, to be between $US3.8 billion and $US4.0 billion, and its earnings per share to be between 2 and 4 US cents. Analysts had been looking for Sun to earn 6 cents a share for the quarter, according to a consensus estimate gathered by Thomson Financial/First Call.