Shares of US network computer maker Sun Microsystems dropped sharply today, a day after the company said it would most likely lose money this quarter as a weak economy pushed Japanese and European sales below expectations.
The shares were off 19.3 per cent, or $2.57, at $10.86 on the Nasdaq this afternoon, where it was by far the most active issue with about 64 million shares traded.
The comments led a slew of Wall Street analysts to cut their estimates, with some saying a recovery was unlikely until next spring.
"Sun's intra-quarter call confirmed the fairly grim picture of demand that we have been seeing," said Goldman Sachs's influential analyst Ms Laura Conigliaro.
"The US is in the process of bottoming, but is languishing at low levels. International is still tightening, with Japan the latest geography to go for Sun," Ms Conigliaro wrote in her analysis.
"More importantly, it appears that the December quarter will lack the seasonal punch that Sun and others normally see, suggesting that the first signs of a recovery may not come until June," she said.
Bear Stearns, ABM Amro, Credit Suisse First Boston, and UBS Warburg were among other brokerages that cut estimates.