Paper Loses
The story says both:
"It has just reported a quarterly loss of $1.7bn for its first fiscal 2009 quarter."
And:
"analysts are expecting Sun to lose $1.35bn on revenues of $12.8bn for its fiscal 2009 year,"
First, if Sun has already lost $1.7bn in the first fiscal quarter and the analysts expect the loses for the fiscal year to be $1.35bn, doesn't that say the analysts expect Sun to make $0.35bn in the next three quarters? I guess they could mean lose another $1.35bn in the year, but that's not what is says.
Second, $1.4bn of the $1.7bn first quarter loss was goodwill write downs and other non-cash stuff. That's a bit different from real cash money losses. From Sun's investor relations site:
"On a non-GAAP basis, net loss for the first quarter of fiscal 2009 was $65 million..."
"Sun ended the quarter with a cash and marketable debt securities balance of $3.121 billion and generated cash flow from operations for the first quarter of fiscal 2009 of $148 million. "
So, they "lost" $1.7bn but ended up the quarter with $148 million more than they started with. This kind of thing isn't at all unusual with the GAAP and accounting rules.
Finally, a couple years ago Sun said they'd reach a 10% operating margin by fiscal 2009 (I think). For a while they were on or ahead of that plan. I personally think the current problems are more a result of external influence, like the sub-prime mortgage financial collapse, than anything Sun management messed up. It's not like Sun is the only tech company whose stock has tanked this year.
Also, the market cap number is nice and all, but you have to convince over %50 percent of the shareholders to sell in order to actually buy a company. I think it's unlikely that %50 percent of Sun stock holders would be happy to sell their shares at $4. I bought some earlier this year and If I can't sell them in the $15 to $20 range, I'm just going to keep them for awhile. I currently don't seem to have any gains I could use losses to balance out.