PALO ALTO, Calif. – Shares of Sun Microsystems Inc. fell more than 11 percent Wednesday after the maker of the computer servers and software behind the Internet lowered its revenue and profit forecasts for the current quarter.
``Without doubt it is a challenging environment out there,'' chief financial officer Michael Lehman said in a conference call with analysts Tuesday. ``We are continuing to make the necessary adjustments to our business model.''
Specifically, Lehman said Sun would shift its sales and marketing teams to concentrate more on accounts with Fortune 500 companies, where Sun sees good opportunities despite the economic slowdown.
Revenue in Sun's fourth quarter, which ends June 30, is expected to be between $3.8 billion and $4 billion. That represents a significant drop from $5 billion in same period last year and $4.1 billion in the third quarter of this year.
Sun expects the reduced sales to translate into earnings per share of 2 cents to 4 cents, excluding one-time events. Analysts surveyed by Thomson Financial/First Call were expecting earnings of 6 cents per share.
Sun shares lost $2.15, or 11.5 percent, to $16.52 in afternoon trading Wednesday on the Nasdaq Stock Market, adding to a 9 percent drop Tuesday.
Some of Sun's suppliers have not been able to provide all the chips and other components the Palo Alto-based company needs, a situation that Lehman said should improve by the end of the quarter.
But by far the biggest contributor to the company's lowered forecasts was a far more severe decline in demand in Europe over the last two months. Sales were also sluggish in the United States and the Asia/Pacific region, Lehman said.
Sun is scheduled to release full results for the fourth quarter and fiscal 2001 on July 19.