Sun expects to post first quarter loss

Shares of Sun Microsystems has plummeted as investors reacted to news that the company expects to post a loss in its first...

Shares of Sun Microsystems has plummeted as investors reacted to news that the company expects to post a loss in its first financial quarter of 2003.

Sun's stock (SUNW) on the Nasdaq dropped almost 27% to close at $4.25 (£2.70), a new 52-week low.

Sun reported earnings per share of one cent for its fourth quarter, but said that it expects to post a loss in its first quarter of 2003, ending 30 September.

Sun reported strong sales of its lower-end one and two-processor servers in the fourth quarter and was able to meet analysts' earnings expectations. The company posted its first net gain in four quarters, including charges, but warned that its move into the black would be short-lived.

Sun executives said the company was likely to post a "slight loss" in the first quarter of 2003. Overall, the company said it expected to earn between 10 cents and 15 cents per share for 2003.

While the US showed an increase in sales for Sun in the quarter, weak Asian and European markets continue to make hardware sales hard to come by. Sun did say that customers are beginning to plot out large-scale server and storage purchases, but that finalised deals are not coming through just yet.

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