After teetering along a recovery path for years, Sun Microsystems is slipping into the mire of a weakening business market.
The company said in a pre-announcement today it would swing to a large quarterly loss. The company expects to lose 25 cents to 35 cents a share on revenues of $2.95 billion to $3.05 billion in the first fiscal quarter. The company will report earnings on Oct. 30.
Sun’s shares closed at $5.78 a share today, down 68 percent for the year. The stock declined to $5.66 a share after the announcement in after-hours trading. The earnings for the first quarter will include a $60 million charge. Not counting that, the loss would be 2 cents to 12 cents a share.
Analysts had been expecting the Santa Clara, Calif. company to report a loss of 1 cent a share on $3.14 billion in sales. A year earlier, Sun earned 3 cents a share, or $89 million, on revenue of $3.22 billion.
Jonathan Schwartz, chief executive of Sun, blamed the lowered expectations on the slowing economy. He said Sun is evaluating whether to take a non-cash write off against the value of its $3.2 goodwill balance. Sun sells software, services and computers to corporations to support their big data centers. But it faces fierce competition from Hewlett-Packard, IBM, Dell and others in a weakening overall market.
