Sun Stays the Course, but Says Things Aren't Easy

Various indicators show that the U.S. economy is picking up -- but from what investors heard from Sun (SUNW Quote) and Intel (INTC Quote) about their midquarter performance, there's no reason to expect a miracle recovery. Thursday afternoon Sun Microsystems updated investors on the third quarter of its fiscal 2003, holding steady with its previous guidance.

At the same time however, the company cautioned that business is coming in slower this quarter than last. In the March quarter, Sun typically sees 50% of its business come in during the final month, and so far the company reports it has "a ways to go" to achieve its estimates.

Back in January, Sun executives chose to describe their outlook for the third quarter in loose terms, promising to push revenue up above the second-quarter's $3.1 billion level, which it believes it is on track to do if March shapes up. Wall Street consensus interpreted that to mean an increase to $3.2 billion in revenue, according to Multex.com, for a 22% year-over-year drop from the second quarter of 2001's $4.1 billion. Sun projected improvement in gross margins from the second quarter's 36.6%, which it stuck with Thursday. ...