NEW YORK (CNNfn) - A big loss in Sun Microsystems sent the Nasdaq composite index lower Tuesday after Goldman Sachs cuts its profit targets for the server maker.
After the close of trading, Sun confirmed many tech investors' fears. The company said it expects earnings per share to range between 2 cents and 4 cents. That's well below the 6 cents per share of profit expected by Wall Street analysts.
The Nasdaq fell 75.49 points, or 3.35 percent, to 2,175.54.
Blame some of that on Sun Microsystems (SUNW: down $1.80 to $18.67, Research, Estimates). Goldman analyst Laura Conigliaro cut her earnings estimate for Sun's upcoming fiscal year to 50 cents per share from 53 cents per share. She also reduced her revenue growth-estimates for the year to 12.8 percent from 15 percent.
In Sun's warning, the company said sales should range between $3.8 billion and $4 billion.
As if on cue, Conigliaro early Tuesday said Sun may have trouble meeting its lowered estimates. She also said there have been no notable improvements in Sun's U.S. business, and there are signs of further slowing in Europe and the Asia-Pacific region as well.
Meanwhile, shares of EMC (EMC: down $3.11 to $33.99, Research, Estimates), the No. 1 supplier of data-storage systems, also fell. Citing similar concerns as those she has for Sun, Conigliaro lowered her 2001 earnings estimate for EMC to 76 cents per share from 81 cents per share. She also reduced her 2002 earnings estimate, forecasting a profit of $1 per share where previously she had expected $1.05 per share.
EMC on Tuesday also said it will cut 1,100 jobs, or 4 percent of its global work force.
Other stocks in the networking segment fell, including: Cisco Systems (CSCO: down $1.59 to $20.46, Research, Estimates); Lucent Technologies (LU: down $1.08 to $8.32, Research, Estimates); Juniper Networks (JNPR: down $5.77 to $46.39, Research, Estimates); and Redback Networks (RBAK: down $2.01 to $13.70, Research, Estimates).
Shares of JDS Uniphase (JDSU: down $2.09 to $19.17, Research, Estimates), the top supplier of components used to build fiber-optic networking equipment, also moved sharply lower.
The American Stock Exchange's networking index fell 23.75 points to 435.12.
Elsewhere, EchoStar Communications (DISH: down $1.70 to $32.32, Research, Estimates), which provides satellite television service, is in talks with SBC Communications (SBC: up $0.83 to $43.18, Research, Estimates) and two other telecom firms to help finance a bid for Hughes Electronics, according to published reports.
On Friday, Hughes, a unit of General Motors (GM: up $1.08 to $57.33, Research, Estimates), announced the abrupt departure of Chairman and CEO Michael Smith. News Corp. (NWS: down $0.50 to $37.10, Research, Estimates) also has been in discussions to buy Hughes.
Other tech gauges fell. The Philadelphia Stock Exchange's semiconductor index shed 31.29 to 623.25. The Goldman Sachs computer hardware index fell 16.77 to 330.46. Goldman's computer software index lost 12.98 to 225.7. 
|
