By Sonya Rabbitte, 7 December 2001 15:12
NEWS Sun Microsystems yesterday issued an upbeat forecast for the current quarter and said business was stabilising. However, the company steered clear of making long-term predictions, claiming the economic climate remained uncertain. In a conference call with analysts, Sun CFO Mike Lehman said sales for the first nine weeks of the quarter had remained stable and the company was on track to meet second quarter forecasts. Lehman said he expected margins to remain steady and revenue to rise on the last quarter. Analysts expect Sun to do better this quarter, forecasting a loss of between two and five cents per share on revenues of $3.1bn. In its first quarter results Sun posted a 43 per cent year-on-year drop in revenues to $2.9bn, as operating losses jumped to $378m. Lehman said the company also expected to take a $500m charge this quarter as it implemented the 4,000 job cull it announced in October. Three-quarters of those redundancies will be made by the end of the year. While IBM remains stiff competition for Sun, CEO Scott McNealy said the company was also competing against Microsoft on software development. He said: "The ground war - cave-by-cave for purchase orders is with IBM, and the air war for developers is with Microsoft," However, McNealy avoided long-term forecasts and said it was still to early to predict how business would progress after this quarter.
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