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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: John Koligman who wrote (10622)	12/9/1997 6:00:00 PM
From: hpeace	Respond to of 97611

JOhn, exchange rate problems would show up in revenue since sales in Japan would transalte back to few revenue dollars and less profit.

To: John Koligman who wrote (10622)	12/9/1997 6:03:00 PM
From: monu	Respond to of 97611

John: I picked this up off Reuters in case you and the others haven't seen it. I own both cpq and sunw and think the markets reaction to Oracle's news was a severe overreaction. I hope I am right. Business News Center By Kourosh Karimkhany Reuters PALO ALTO, Calif. (Dec. 9) - Oracle Corp. stock tumbled 29 percent in heavy trading Tuesday after the database software company said it faced at least two quarters of slowing profit growth because of sluggish business in Asia. More worrisome, Oracle, the world's second-largest software company, may face several quarters of slow revenue growth. Analysts said most companies that would need Oracle's high-end database and business software already have a copy. ''We've said they face market saturation,'' said Melissa Eisenstat at Oppenheimer & Co. It will take a few quarters for Oracle to find enough business to boost sales growth again, analysts said. Oracle stock fell $9.44 to $22.94 on volume of 171.8 million shares, a record for a single stock on Nasdaq. The stock touched $22.375 during the session, a two-year low. After the market closed Monday, Oracle said its second-quarter net income rose just 4.5 percent to $187 million, significantly less than Wall Street had expected. The company, based in Redwood Shores, Calif., blamed economic woes in Asia and a restructuring of its sales force this summer. Oracle writes database software, the computer programs big companies use to store and retrieve huge amounts of data, such as customer names and inventory lists. It also sells financial and manufacturing software that help managers keep track of their operations. Wall Street watches Oracle's stock closely because its databases serve as a foundation for millions of dollars of other business management software. Weak sales by Oracle could mean a broad segment of the software industry is in trouble, analysts said. Oracle faces several fundamental problems. First, its sales of financial and manufacturing software -- until now its fastest growing business -- rose just 7 percent, down from 50 percent to 80 percent in recent quarters. That suggests Oracle is losing business to nimbler rivals like PeopleSoft Inc., analysts said. ''Revenue growth was weak across the board,'' said James Pickrel at Hambrecht & Quist in San Francisco. ''The shortfall in applications revenue is particularly startling in that key competitors have been growing at rates above 50 percent.'' Second, Raymond Lane, Oracle's president, said late Monday that the company landed several big software contracts from telecommunication companies last year. The company likely will not be able to sell much more software to that segment for several more quarters. That suggests Oracle's list of potential customers is thinning, analysts said. The company is already the biggest vendor in the $5 billion database software business. Pickrel said it could take a few quarters for Oracle to come up with a new product mix and a strategy to get sales growing more quickly again. Analysts scrambled Tuesday to cut earnings estimates. At least six of them slashed the stock's rating to ''hold'' or ''accumulate'' from ''buy.'' Pickrel cut his earnings forecast for fiscal 1998 to 88 cents a share from $1.10. Because of its bellwether status, Oracle dragged down most other technology stocks. Intel Corp. fell $2.81 to $75.625, Microsoft Corp. fell $1.81 to $144.31, Compaq Computer Corp. slid $2.125 to $63.375 and Cisco Systems Inc. dropped $2.31 to $87.44. REUTERS Reut17:30 12-09-97