Sun Microsystems said yesterday a slowdown in capital spending had hit US demand and its sales for the current third fiscal quarter.

"We are disappointed with one and only one thing, and that is the US economy," chief operating officer, Mr Ed Zander, told analysts in a conference call.

Sun Microsystems employs 250 people in its software development centre in Dublin and recently announced that it would double that number.

Earnings per share will be seven-nine US cents in the quarter, said Mr Michael Lehman, Sun chief financial officer. Analysts on average had been forecasting earnings per share of 15 cents in the current quarter.