Hi Scott,
Considering ORCL hasn't warned, I doubt they will miss. However, as RR points out, it's going to be about the forward guidance. That could have an impact on the direction of the NAZ for a spell..................
Oracle prepares to announce earnings
By Mike Tarsala, CBS.MarketWatch.com
Last Update: 5:49 PM ET June 15, 2001
REDWOOD SHORES, Calif. (CBS.MW) - Oracle Corp. is expected to report fiscal fourth quarter revenue of $3.4 billion Monday, but analysts seem more concerned about what the company will say about its future sales outlook.
Database-management software maker Oracle (ORCL: news, msgs, alerts) , the No.2 software seller worldwide behind Microsoft, is expected to report adjusted earnings of 14 cents a share, or roughly $840 million, according to First Call/Thomson Financial. The result is expected to be down 9 percent compared with earnings of $926 million, or an adjusted 16 cents a share, in the year-ago quarter.
Rather than focusing on what should be a lackluster quarter by many accounts, analysts want to know what the company will say about sales in the current fiscal first quarter, which started in June, and beyond.
During its last update to investors, Oracle CFO Jeff Henley said that economic conditions and troubles with tough year-ago comparisons persist. At the time, Henley said that his best guess was that business would start to pick up again in August.
Analysts said they're skeptical. On June 13, CIBC World Markets reported it expects to lower its Oracle fiscal-year 2002 sales forecast. CIBC's 2002 earnings estimate of 52 cents a share, two cents above consensus, may also be at risk, the investment bank wrote in a note to clients.
CIBC added that meeting near-term license revenue could be a problem, as the company faces increased competition from its two main rivals, IBM and Microsoft.
Oracle controlled 33.8 percent of the $8.8 billion database software market in 2000, ahead of IBM with 30.1 percent, according to market research firm Gartner Group Dataquest. However, Microsoft (MSFT: news, msgs, alerts) made sales gains last year in the market for database software that runs on the Windows operating system, and IBM gained in software that works with Unix, Gartner reported.
Because of its large market share, nearly every type of server-based business application works with Oracle's database, including software from applications-software competitors SAP AG, (SAP: news, msgs, alerts) , Siebel Systems (SEBL: news, msgs, alerts) , I2 Technologies (ITWO: news, msgs, alerts) and IBM.
But some already are skeptical that Oracle can increase its lead over the competition.
"Oracle is feeling a lot of revenue pressure," said Betsy Burton, the Gartner Group vice president who led the market share study, shortly after it was released in late May. "Oracle's third-quarter revenue growth of 6 percent is indicative that people are starting to consider other vendors."
A new version of the company's database software that Oracle unveiled at company headquarters this week could help sales, said Jeremy Burton, Oracle's senior vice president in charge of product marketing. He predicted it will "change the database business forever," because of its ability to run a single business software application across several computers, cutting computer costs by as much as a third.
The latest incarnation of the software may indeed drive sales, but analysts say none of those sales will start to show up until November.
On Friday, Oracle shares rose 15 cents to $15 on Nasdaq volume of 59.6 million shares.
Mike Tarsala is a San Francisco-based reporter for CBS.MarketWatch.com.
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