Feeds

Investors shed Sun shares

Analysts upset

  • alert
  • submit to reddit

5 things you didn’t know about cloud backup

Shares of Sun Microsystems have fallen close to 15 percent during Tuesday's trading, as investors react to a massive charge taken by the company.

Yesterday, Sun revealed that it is to take a $1.05 billion charge, turning what was once $12 million fourth quarter profit into a $1.04 billion loss. The accounting shift came as a result of what Sun sees as an extremely tough first quarter that will crimp its taxable income.

Investors did not stomach the news well, sending Sun's shares down 14.50 percent to $3.30, at the time of this report. Analysts also chimed in and cut their expectations for Sun's stock.

Morgan Stanley has put Sun at "underweight" down from "equal weight" and Bear Sterns has knocked Sun to "underperform" from "peer perform." A.G. Edwards also downgraded Sun to "sell" from "hold."

Analysts are pointing the same line that has dogged Sun since the downturn hit. They perceive customers moving away from Unix boxes and toward Linux servers - a shift which cuts into Sun's Sparc/Solaris business.

Sun tends to have very conservative accounting practices. It's financial reports are crisp and clean, and some analysts see the accounting change as a move in line with this straightforward tradition and little else. The rash of downgrades, however, indicates that many see the earnings revision as more than a book-keeping safety measure.

Sun still has billions in the bank and can weather the storm as it tries to realign its business to meet changing trends. The company has given into pressure and started shipping Linux servers and keeps trying to match Dell on price wherever possible.

Billion dollar charges, however, tend to bring out the worst in the financial community with Sun facing pressure to make more drastic changes and right its falling shares. ®

5 things you didn’t know about cloud backup

More from The Register

next story
BBC: We're going to slip CODING into kids' TV
Pureed-carrot-in-ice cream C++ surprise
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Twitter: La la la, we have not heard of any NUDE JLaw, Upton SELFIES
If there are any on our site it is not our fault as we are not a PUBLISHER
Facebook, Google and Instagram 'worse than drugs' says Miley Cyrus
Italian boffins agree with popette's theory that haters are the real wrecking balls
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?