Will Sun Microsystems Live Up To Plan? (JAVA)

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Today after the close of trading we’ll get to see earnings out of Sun Microsystems Inc. (NASDAQ: JAVA). The estimates from First Call are $0.18 EPS on $3.38 billion in revenues.  Next quarter estimates are $0.39 EPS on $3.96 billion in revenues. Estimates for fiscal June-2008 are $1.13 EPS on $14.19 billion in revenues. Estimates for June-2009 are $1.36 EPS on $14.74 billion in revenues.

Analysts have an average price target north of $20.00, and Sun Microsystems’ 52-week trading range is $14.20 to $25.04 after you adjust for that November 1:4 reverse stock split. The most recent analyst call with any changes was an equal-weight rating initiation from Lehman Brothers.Shares are down more than 10% since the start of 2008 and have fallenby about 20% since their 1:4 reverse split since early November.

Options traders appear to be braced for a move of only about $0.58 to $0.65 in either direction, although this is after a 3% move and with a lot of time value left.

Sun has been making some interesting bolt on acquisitions, but many traders are still confused over the company’s plans and over its path to maintaining more steady profits.  As far as which other stocks may be affected regularly based upon Sun Micro’s earnings report, that answer is generally none.  Not anymore.

Jon C. Ogg
May 1, 2008