Sun Microsystems warned that slow order rates for the company's
hardware, particularly in Europe and Japan, will make it tough for
it to post a profit in its first quarter.
"It will be a real stretch to hit that $3.7bn (£2.55bn) number,
which we characterised as break-even last quarter," said Michael
Lehman, Sun's vice-president and chief financial officer.
Sun's business has suffered as telecommunications companies,
service providers and financial services firms have cut back their
spending on its hardware products. While government sectors have
provided a bright spot for the company, overall sales have dropped
to a point where Sun may well struggle to meet even conservative
revenue estimates, Lehman said.
Financial analysts expected Sun to report earnings of two cents per
share on $3.8bn (£2.61bn) in revenue, according to a consensus
estimate compiled by Thomson Financial/First Call. The company's
fiscal first quarter ends on 30 September, with the report of its
results due on 18 October.
While business was weak this quarter in Europe and Japan, the US
and most other regions generated sales close to Sun's
expectations.
Sun would not speculate on its results for the second quarter,
saying only that new products and the continued roll-out of its
UltraSPARC III processor across its server and workstation lines
should generate some improvement.
Sun plans to put a 900MHz version of the UltraSPARC III in some of
its workstations later this quarter, Lehman said. Users can
currently purchase a Sun Blade 1000 Workstation with the processor
running at 750MHz.
Lehman said that the company had worked to cut excess spending in
its operations, which should help it come closer to its revenue
target. But he vowed that the company would not cut back on
investments in future products.
"We are determined to keep investing [in research and
development]," Lehman said.