There's not much bad to be said about Sun Microsystems (NASDAQ:SUNW) that hasn't already been said. Sun is being picked apart by Hewlett-Packard (NYSE:HPQ) and IBM (NYSE:IBM) on the high end, and Dell (NASDAQ:DELL) on the low end...Yada, yada, yada, etc., etc.

Well, actually, there is one thing. In the first quarter, Sun produced negative quarterly cash flow from operations for the first time in years.

Yesterday, Sun reported that first-quarter revenues declined 8% year over year to $2.53 billion. With a loss of $286 million, or $0.09 per share, Sun hit the low end of revised guidance offered a little over two weeks ago. Cash flow from operations hit negative $49 million, compared to more than $1 billion just last quarter.

Management offered no forward guidance whatsoever, with no turnaround in sight. Gross margins declined to 40.1% from 41.2% last year, reflecting competitive pressures. On top of that, cash on the balance sheet declined to $5.5 billion from $5.7 billion last quarter.

But while it's hard to pick the stock at $3.60 a share, or $11.7 billion, it's not easy to pan it, either.

Sun has been here before. The company still has that aforementioned $5.5 billion on the balance sheet, and a plan to fight back on both the high and low ends while growing its higher-margin software business. So maybe the Sun hasn't quite set yet; however, it is still quite possible it'll never rise again.

Here's the best I can do: Sun's probably not going to zero, but its upside becomes more questionable with time. One thing is clear: Sun has to pick things up fast before it suffers a permanent loss of market share. No pick, no pan. Just avoid.

Jeff Hwang can be reached at