SiliconBeat

Rackable Systems, the Fremont provider of data-center servers and storage products, lowered its guidance for its 2008 fiscal year financial results, citing a “dramatic” market downturn. Sales for 2008 are now expected to be no more than $300 million and as low as $275 billion. That’s far below  the $331 to $364 million range estimated by analysts surveyed by Thomson Reuters. Rackable also expects a big loss of between $1.46 to $1.26 per share compared with the 5 to 10 cent analysts had previously expected.

“The recent market downturn has been dramatic and has greatly impacted the timing of our customers’ buying decisions. The swift decline of the economy caused a demonstrable slow down in corporate purchasing as we entered September,” said CEO Mark Barrenechea. “While we felt positive business momentum early in our third quarter, this abrupt financial and economic deterioration is impacting our ability to meet ur previously provided fiscal 2008 outlook.”

Rackable prevailed in a nasty proxy fight earlier this year with shareholder Richard Leza, who grew incensed at the executive compensation doled out by the company’s board last year, including stock-based pay for the Barrenechea valued at nearly $13 million.