Sun Microsystems Inc., the world's fourth-biggest maker of server computers, may have its credit rating reduced by Moody's Investors Service as its sales and market share decline.
The new rating would apply to about $550 million (U.S.) worth of debt, Moody's said yesterday. Profitability has waned as Sun gets more sales from storage products instead of powerful servers, whose profit margins are higher, Moody's said.
Sun won't make a profit this quarter because customers are slashing technology budgets, chief financial officer Michael Lehman said this month.
Sales of servers, computers that run websites and corporate networks dropped 7.1 per cent last quarter to $1.7 billion.
Sun's plan to buy back $1 billion in shares may lead to a downgrade if it increases financial risk, Moody's said.
