This among other things are good reasons to buy....
ORACLE CORP. (ORCL) 18 3/4 CLOSED. With the tech sector already reeling from the woes affecting the Asian markets, more fuel may be added to the fire this morning after Larry Ellison, head of this relational database concern noted on Friday that the Asian crisis could cause the company to miss earnings expectations by a significant wide margin. While Mr. Ellison was not specific on the quarter(s) that may be affected, he did say that if the problems in Asia continue, its Far East operations could prompt the company to miss Wall Street forecasts by more than a few cents. Hence, in a around-about way, Mr. Ellison is putting Wall Street and investors on notice that the near-term outlook is so far not coming in as expected, although Mr. Ellison continues to believe that Oracle's business remains very solid. According to an interview by Reuters conducted on Friday, Mr Ellison said that "the Asian problem is manageable as long as it does not become a calamity of epic proportions. Right now you see the impact of Asia on us; the currency devaluations over there certainly hurt our growth in U.S.-denominated dollars, the economic weakness has hurt our profitability, but it won't hurt us any worse than any other tech company." According to Mr. Ellison, Oracle business in Asia was growing at 50%, as recently as last year, but the growth has now turned negative. Oracle generates around 15% of its total revenues from this region. So far, the indication is that the lower growth perspective from Mr. Ellison is only going hurt the stock modestly this morning, as the stock has already adjusted downward for the slower growth rate the company gave with its fiscal 2Q results. However, anyone looking to buy the stock cheap at current levels could wait a while because it seems that the Asian woes are likely to be with us for quite some time, impacting Oracle results over the near-term. |
