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Technology Stocks : Oracle Corporation (ORCL)
ORCL 220.61+0.3%Nov 18 3:59 PM EST
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To: Michael Olin who wrote (17737)1/5/2003 10:33:20 PM
From: hueyone   of 19079
 
On another note, Oracle does not look so bad on S&P Core Earnings measures, which include stock option expense against income among other things. S&P uses the Black Scholes method of valuing options at time of issue and then amortizes the expense over the vesting periods, which is three to four years for the average company. One of the reasons Oracle income is not impacted by stock options so badly on the Core Earnings measure is that I believe many of those options that Larry exercised in fiscal 2001 were granted a very long time ago, some as long ago as 1991 (according to Lizzie Tudor), so these old options, which have long since vested, are not counted as an expense in the current S&P Core Earnings nor are they counted in the footnotes of the Oracle 10ks that gives stock option expense figures.

On the bright side, Oracle has not been issuing options lately at a rate to totally wipe out earnings like some companies have. However, we usually never know for sure until somewhat belatedly when the 10ks come out once a year.

Here are the S&P Core Earnings Measures for companies through July, 2002.

bwnt.businessweek.com

Here is the explanation of Core Earnings:

www2.standardandpoors.com

Regards, Huey
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