- SAN FRANCISCO (Reuters) -
Shares of computer maker Sun Microsystems Inc. SUNW.O dropped 27 percent
on Friday after it forecast a loss this quarter, but storage networking
firms kindled expectations their industry was recovering.
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- Shares of Sun, the most actively traded share on Nasdaq,
dropped as low as $4.10, the lowest in more than four years, a day after
the computer maker projected a slide back to losses this quarter as it
posted its first quarterly profit in a year.
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- Wall Street lowered expectations for earnings in fiscal
2003 and investment bank Credit Suisse First Boston cut its rating on the
company, which makes high-end computers that manage networks, to "hold"
from "buy."
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- Personal computer maker Gateway Inc. GTW.N bested Wall
Street average expectations for revenue, and unit sales ticked up from
the previous quarter, beating typical seasonal trends, but its loss was
wider than the consensus and shares fell 7 percent to $3.39 on Friday.
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- "The higher unit shipment rate was met by higher
losses," CSFB analyst Kevin McCarthy wrote, pointing to Gateway's
costs, which are higher than rival Dell Computer Corp's.
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- Data storage makers, one of the last technology sectors
to slide into the current downturn, reported signs of improvement in the
industry.
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- Some storage stocks rose, although analysts cautioned
on valuations of others, such as storage heavyweight EMC Corp. EMC.N ,
shares of which sank 4 percent to $8.05, the second day of decline since
EMC's early Thursday announcement.
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- McData Corp. MCDT.O and QLogic Corp. QLGC.O , both makers
of equipment to tie together storage networks, reported better than-expected-results.
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- "QLogic remains the premier arms supplier to the
server/storage vendors and is extending its position to being an enabling
technology vendor for the networking equipment vendors as well," Bear
Stearns analyst Andrew Neff wrote.
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- "We maintain our Neutral rating on the stock as
we don't see a compelling valuation upside from the current level,"
he added. The stock rose 1.4 percent to $41.82.
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- McData, which makes high-end equipment, reported strong
demand for its new 2-gigabit storage switches, prompting Merrill Lynch
analyst John Roy to upgrade the stock to buy from neutral. Its shares jumped
19 percent to $9.88.
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- Meanwhile, shares of Sun fell 27.6 percent or $1.60 to
$4.20 in afternoon trading on Nasdaq, compared with a 2 percent decline
in the broader Nasdaq Composite Index .IXIC .
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- Sun shares are off about 66 percent so far this year,
compared with a 32 percent drop in the broader American Stock Exchange
Computer Hardware Index.
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