September 29, 2003 2:32 PM PDT
Sun warns of hefty loss
Although it has not yet finished its accounting for the first quarter, Sun said that it expects a loss of between 7 cents and 10 cents per share, including a tax provision of about a penny per share. In a statement, the server maker said the loss "reflects a particularly difficult quarter for the company due in part to intense market and competitive dynamics."
Sun also announced Monday that it is increasing an allowance it had made for its deferred tax assets, resulting in a $1 billion noncash charge in the fourth quarter, which ended June 30. As a result, the company said it is revising its fourth-quarter results to a loss of $1.04 billion, or 32 cents per share.
It originally reported a $12 million profit on revenue of nearly $3 billion for the quarter.
Sun, which is based in Santa Clara, Calif., had not given a prior estimate for the first quarter, which ended on Sunday. First Call's earnings estimate for that quarter was on a "pro forma" basis, a representative of the tracking firm said, and so was not comparable with Sun's forecast on Monday.
Earlier this month, Sun said it was cutting 1,000 jobs as part of its effort to return to profitability.
Sun shares headed lower in after-hours trading, changing hands on Monday afternoon at $3.54 on the Island ECN. That represents a drop of 32 cents, or more than 8 percent, over the price at the close of regular trading. Ahead of the warning, Sun shares closed at $3.86, up 2 cents, or 0.5 percent.