Sun's shares tumble after disappointing 1Q results

NEW YORK - Shares of Sun Microsystems Inc. tumbled Friday, one day after the server and business-software maker posted a $1.7 billion loss for its first quarter, with adjusted results below Wall Street's expectations.

The Santa Clara, Calif., company, which has counted the financial-services industry as one of its large customers, posted an adjusted loss of 9 cents per share, slightly worse than the 8 cents per share that analysts were expecting, according to a Thomson Reuters poll.

Sun did not give any forecast for the rest of the year.

Sun said North America was its weakest region in the quarter, and business from the financial companies in the Northeast declined 20 percent from a year ago.

BMO Capital Markets analyst Keith Bachman, who has a "Market Perform" rating on the stock, called the quarter's results "disappointing."

"With all the inexpensive stocks in our universe, we don't have any interest in moving to a more constructive position," he wrote in a note to investors. "We believe that Sun is stuck, with negative product mix issues and a weak economic environment, neither of which we see changing over the next few quarters."

Citi Investment Research analyst Richard Gardner, on the other hand, kept a "Buy" rating on Sun and said while the stock "admittedly" lacks a catalyst, he continues to see "compelling value for long-term investors."

Shares of the Sun fell 64 cents, or 12 percent, to $4.65 in late afternoon trading. The stock has traded in the 52-week range of $4.04 and $23.04.

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