Sun Projects Loss, Cuts Employees

Sun Microsystems officials projected the companys second quarterly loss in a row today. The projected loss - 5 cents to 7 cents per share - is higher than expected, and Sun said it will lay off 9 percent of its work force, or about 3,870 employees.

The estimates came as Sun CEO Scott McNealy discussed preliminary results for the first quarter ended Sept. 30. Revenue for the quarter is expected to be in the range of $2.7 billion to $2.9 billion. First Calls consensus estimate indicated that Wall Street analysts were expecting a possible loss of 4 cents per share on revenue of $3.29 billion.

The events of Sept. 11 altered the results for the quarter as customers momentarily suspended purchases, said Michael Lehman, Suns chief financial officer.

"The events of Sept. 11 have impacted us all. Things were tough with the economy before, but now we are feeling increasing uncertainties both in the U.S. and globally," McNealy said.

McNealy said Sun had anticipated a slowdown, and has been "aggressively managing costs in all areas. . . . Without that, we would clearly be talking about reducing capacity to an even greater extent."

On Sept. 25, Sun introduced a powerful new server line, the Sun Fire 15K, in New York City, and took steps swiftly after Sept. 11 to restore its field and sales offices that were lost in the collapse of the World Trade Center and which housed 346 employees.

The computer industry is consolidating and downsizing, McNealy added, but "we are confident the market opportunities for Sun are absolutely huge. . . . We intend to get this company profitable again as soon as possible."