Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (13765)	9/3/2002 4:30:37 PM
From: stockman_scott	Respond to of 57684

Oracle Ends Quarter Amid Bearish Climate Tue Sep 3, 3:40 PM ET PALO ALTO, Calif. (Reuters) - Oracle Corp. wrapped up its fiscal first quarter last week, amid significantly lowered expectations for a near-term revival of technology spending. "Our best estimate is that we will not see a return to double-digit growth for our leading companies before mid-(2003)," former technology bull Credit Suisse First Boston wrote in a recent software research note that included coverage of Redwood Shores, California-based Oracle. Oracle shares -- which have lost nearly a third of their value so far this year -- were 57 cents lower at $9.02 in late Nasdaq trade as U.S. stocks shed recent gains. Looking to Oracle's Sept. 17 earnings report, analysts and the software maker -- which for several quarters issued too-bullish forecasts -- are resigned to another down quarter. Company Chief Financial Officer Jeff Henley in June said first-quarter software license sales -- a key measure of core growth -- could be 15 percent to 25 percent lower than a year earlier. Sanford C. Bernstein analyst Charles Di Bona recently trimmed his earnings outlook by a penny to 8 cents a share, citing concerns about sales of the company's business-automation software and its application servers. Rob Tholemeier, an analyst at Wells Fargo Securities, last week raised his per-share profit outlook by 1 cent to 8 cents, assuming additional cost savings. Oracle is second only to software giant Microsoft Corp. in terms of holding down operating costs. "We would not be surprised to see the company beat our (earnings-per-share) estimate on even slightly lower-than-forecast revenue," Tholemeier said. Old concerns about Oracle's businesses remain on analysts' radar screens. Revenue from its applications that automate such things as accounting and sales is hurting, as potential buyers remain reluctant to make new purchases and Oracle works to overcome damage from early quality problems with the software. "Recent negative press about (Oracle's) 11i application suite and (Oracle's) comments about the possible impact of the recent issues in California compound the risk of the overall weak (information technology) spending environment," Di Bona said. Electronics and testing equipment maker Agilent Technologies Inc. in August blamed its recent quarterly loss on weakness in the telecom sector and troubles it had moving customer information from numerous order-booking software programs to a new Oracle system. A company spokeswoman said Agilent would have had similar problems with software from other vendors -- but the news struck a familiar chord with investors. In July, the state of California scrapped its $95 million, multi-agency software deal with Oracle after months of political controversy over potential conflict of interest claims against senior aides to Gov. Gray Davis ( news - web sites). For many quarters, analysts also have wrung their hands over what appears to be a maturing database market. And, on other fronts, International Business Machines Corp. this year has been making much of a report from Gartner Inc. unit Dataquest, which showed that Big Blue had unseated Oracle as the No. 1 database provider -- based on total revenue -- following its purchase of Informix. "We think that Oracle is correct when the company claims not to be losing market share if market share is counted in seats, users or applications," Tholemeier said. He said Oracle's database revenue is off due to weak spending, and because its mix of sales has shifted toward Oracle's stripped-down Standard Edition product. "The bottom line is that Oracle has a huge installed base, the switching costs are huge, and Oracle's products are best," Tholemeier said.