Computer maker forecasts big loss, also sets $1 billion charge; stock sinks in after-hours trading.
September 29, 2003: 5:04 PM EDT
NEW YORK (CNN/Money) - Sun Microsystems warned Monday it expects a much wider loss for the latest quarter, news that sent the stock of the troubled computer and software maker tumbling.
The maker of servers, semiconductors and software said it expects a loss of 7 cents to 10 cents a share for its fiscal first quarter ending in September, including a tax provision of a penny a share. Analysts were expecting Sun to lose two cents a share, according to First Call.
Shares of Sun (SUNW: Research, Estimates) plunged 9 percent to $3.51 in after-hours trading, according to Island ECN.
Sun has struggled more than most tech companies in recent years as more and more corporations have been choosing either servers that run on Intel's microprocessors and Microsoft's Windows operating system or servers that use the open source Linux operating system.
Sun's hardware and software run on Solaris, a proprietary version of the Unix operating system.
"This is further evidence of a deterioration in their business," Brent Bracelin, an analyst with Pacific Crest Securities, said after Sun's announcement.
The company also said it was taking a $1.05 billion charge in its fiscal fourth quarter which ended in June, in order to reflect a change in accounting for its tax allowance.
As a result, Sun said it is revising its fourth quarter income statement to show a loss of $1 billion, or 32 cents a share. Sun had previously reported a net profit of $12 million, or a penny per share, for the quarter.
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