After-hours investors who didn't want to think about slowing sales growth at

Sun Microsystems

(SUNW) - Get Sunworks, Inc. Report

Thursday are paying the price on Friday.

Although Sun reported fiscal second-quarter earnings in line with expectations on Thursday after the close, sales came in more than $100 million light. Moreover, the company was forced to lower its guidance for revenue growth in 2001. Perhaps reassured by the old familiar tones of CEO Scott McNealy's loud

trash talking on the conference call following the earnings release, investors took it all in stride; after surging 7.7% in regular trading, Sun's stock held its ground in after-hours trading.

Sun Down
Investors back off the stock as analysts cut their estimates

Investors aren't taking things in stride anymore, as Sun was lately falling $4.06, or 12%, to $30.81. The reason? The analyst community has

ratified the bad news about slowing growth. Based on the company's guidance, every major brokerage firm covering the stock has reduced its earnings estimates for Sun. Two firms,

TheStreet Recommends

Sanford Bernstein

and

SG Cowen

, actually downgraded the stock. (Neither firm has done underwriting for the company.)

One shouldn't overstate the problem. Sun's revenue miss was quite minor in comparison to the massive shortfalls confessed by other technology companies lately. Sales grew 44% in the quarter, hardly anemic growth. To some extent, Sun is merely experiencing the law of large numbers and tough comparisons. In its last five quarters, Sun the company has posted accelerating year-over-year sales growth of 22.8%, 25.4%, 35.5%, 41.8% and 60.4%.

But it's probably safe to say that an era is over for Sun. The stock's 500% rise between January 1999 and September 2000 was a reflection of the market's confidence, reinforced by the company's fundamental performance, that nothing could slow the Sun juggernaut. The market is looking at things much differently now.

"People got carried away with these growth rates," says

A.G. Edwards

analyst Shebly Seyrafi. (His firm hasn't done underwriting for Sun.) "As long as people have reasonable expectations about long-term growth, they'll do well."