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Friday, 5 October, 2001, 21:08 GMT 22:08 UK
Sun and AMD deepen tech gloom
Sun Microsystems chief executive Scott McNealy
Sun chief executive McNealy: The already tough markets have become tougher
The computer network company Sun Microsystems has warned the losses it made earlier this year were larger than expected and said almost 4,000 jobs will go.

It blamed growing global economic uncertainty for the poor performance and warned of worse to come.

Meanwhile the chip maker Advanced Micro Devices (AMD) has said sales fell and losses rose during the third quarter.

The company blamed the worse than expected results on a price war with rival Intel.

Job losses

The computer industry was already struggling before the terrorist attacks, and Sun admitted the events of last month could have negative implications for some time.

"Things were tough with the economy before, but now we are facing increasing uncertainties both in the US and globally," said Sun's chief executive Scott McNealy.

"In addition, the events of 11 September have impacted us all."

"Our business nearly ground to a halt in the two weeks after that tragic day," added chief financial officer Mike Lehman.

"Further, we believe the impact of these events will not be limited to our fiscal first quarter."

Almost one in ten of Sun's workers will lose their jobs as the company reins in expenses.


Sun did not specify how much money it lost during the second quarter, though it said it predicted losses of between 5 and 7 cents per share.

Analysts had predicted losses of 4 cents per share.

First quarter revenues of between $2.7bn and $2.9bn during the first quarter were also lower than predicted.

Sun said it expected to be back in the black by the summer of 2002.

The company's share price fell on the news, but then recovered in late trade to finish up 58 cents at $9.87, as shares in general were buoyed by the call for $60bn more tax cuts from President George W Bush.

AMD sales suffer

In more bad news for the tech sector, chip maker AMD said its third quarter sales had dropped 22% from the previous quarter.

The company blamed the drop on the price war with its main rival Intel.

"In the face of very aggressive competition, average-selling prices for PC processors declined sharply, which resulted in substantially lower revenues," the company said in a statement.

AMD said the fall in sales would mean its pro-forma loss would be between 26 to 31 cents a share, against Wall Street forecasts of about 12 cents a share.

Shares in the company closed down 40 cents at $8.60.

See also:

04 Oct 01 | Business
Silicon Valley feels the pinch
30 Aug 01 | Business
Sun warns on sales
30 May 01 | Business
Investors take gloomy view of Sun
26 Apr 01 | Business
Sun to close for a week
20 Apr 01 | Business
Sun reports lower profits
10 Feb 00 | Microsoft
Sun Microsystems: A brief history
24 Jan 01 | Business
Microsoft settles Sun dispute
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