A flagging worldwide economy has Sun Microsystems Inc. still expecting a loss for its first fiscal quarter, the company said Thursday in its mid-quarter update for analysts.

In line with earlier guidance, Sun forecast a “slight loss” for its first quarter, ending Sept. 30, as sales remain tough to come by in the hardware industry. It predicted that revenue will be close to its first-quarter total last year of US$2.86 billion. The company is due to report results Oct. 17.

“We have not seen any improvement in the current IT spending environment,” said Chief Financial Officer and Executive Vice-President Stephen McGowan, during a conference call with press and analysts. “In fact, some would say it might actually be worsening.”

The Santa Clara, Calif., vendor has seen customers pull back on large projects that would have included sales of its high-end servers. Such cutbacks have punished Sun over the last year and a half.

It returned to profitability in its fourth quarter, which ended in June, after posting losses before charges in three previous consecutive periods. A first-quarter loss would reverse the recent momentum.

Sun expects to have cut its workforce by 1,000 by year-end, with some of those reductions occurring this quarter, McGowan said.