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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: Sonki who wrote (4425)	12/11/1997 9:30:00 PM
From: Maverick	Respond to of 19080

Oracle stock drops 29% Record volume: Nasdaq investors brutal over sales outlook. BY MIGUEL HELFT Mercury News Staff Writer Shares of Oracle Corp. lost nearly one-third of their value Tuesday in the heaviest trading day ever for a Nasdaq stock. The massive investor sell-off was driven by worries that the company's core database business is slowing and sales of its other software are faltering in the face of sharpening competition. Redwood Shores-based Oracle, the nation's second-largest software company and long a darling on Wall Street, dropped a stunning $9.44, or 29 percent, to $22.94, a day after the company disclosed disappointingly slow sales growth. As analyst after analyst cut earnings estimates Tuesday for the coming two quarters, investors traded 172.5 million shares of Oracle's stock. The plummeting price wiped out more than $9 billion of the company's market value and cut $2.14 billion from Chief Executive Larry Ellison's fortune, dropping the software mogul three notches to seventh in the Forbes 400 ranking of the nation's richest people. The plunge of so huge a giant -- whose products are little known to consumers but a mainstay for corporations -- stirred enough investor uncertainty about the earnings outlook for other technology companies to pull down the overall market, leaving the technology-heavy Nasdaq with a loss of 5.8 percent. The trading volume for Oracle shares was not the largest in history. Nasdaq measures volume by counting sell and buy orders separately, while other exchanges count each sell-buy order as one. On the New York Stock Exchange, the record volume was set by Occidental Petroleum, with 103.8 million shares on June 17, 1988. Trouble in Asia Oracle said a rapid falloff in demand for its products in Asia, along with a strong dollar that slowed exports globally and a decline in sales to U.S. telecommunications companies, were largely responsible for its weak earnings growth. For the quarter that ended Nov. 30, Oracle reported earnings of $187 million, up 4 percent from $179 million in the same period a year earlier, and revenue of $1.6 billion, up from $1.3 billion. But analysts looked for deeper signs of trouble at a company that has long dominated the database business.

To: Sonki who wrote (4425)	12/11/1997 9:31:00 PM
From: Maverick	Respond to of 19080

And they found several key problems, even though most analysts say the long-term outlook for the company remains strong. Although economic turmoil in Asia, a region that accounts for 15 percent of Oracle sales, contributed to some of the earnings shortfall, the company's core business is in need of a tuneup, analysts said. ''Their database sales were disappointing and their applications sales were disappointing,'' said Carl Olofson, research director at International Data Corp., a market research firm in Framingham, Mass. ''Those have been the drivers for their growth.'' Oracle writes database software, the computer programs that companies use to store and retrieve huge amounts of business information in their computer networks. Although that market represents the core of Oracle's business, its growth has slowed to about 20 percent a year. In recent years, Oracle also entered the fast-growing market for business applications, the software that taps those databases to help company managers run core business functions such as accounting, human resources, payroll, distribution and manufacturing. Although Oracle has nearly half the market for large databases, the company is facing tough competition from Microsoft Corp. for medium-sized businesses seeking a low-cost product. It is that low-end market, where the two companies run neck-and-neck with about 30 percent of total sales each, that accounts for most of the growth in the database business today, Olofson said. Microsoft's growth in this area has been more rapid. Oracle has cut its prices significantly to match those of Microsoft. ''Clearly . . . that has cost them revenue,'' Olofson said. Other analysts said the sluggish performance of the company's applications software could turn out to be the main source of concern in the long term. ''They have been spending a ton of money building up this applications business,'' said Robert Tholemeier, an analyst with First Albany Corp. in New York. Oracle reported $108 million in sales for those products in the second quarter -- a small proportion of its overall $1.6 billion in revenue for the period -- and that is not enough, Tholemeier said. ''Oracle should be doing about $200 million in applications. Their competitors are able to do it.''

To: Sonki who wrote (4425)	12/11/1997 9:32:00 PM
From: Maverick	Respond to of 19080

The market for business applications was worth $5.4 billion globally in 1996 and is growing at a 50 percent rate, according to IDC. The market is dominated by Germany's's SAP AG, while Oracle, PeopleSoft Inc. of Pleasanton and Baan Co. N.V. of Menlo Park follow far behind. ''People are buying databases because they buy an application,'' Tholemeier said. ''If you lose the applications business you lose revenue and you lose strategic market share against competitors.'' Locking in a customer with a database and the business applications software also guarantees ''no-brainer'' sales of upgrades, add-ons and services, Tholemeier said. Oracle also could be suffering from its position as both a database and an applications vendor. Companies such as SAP, PeopleSoft and Baan typically team up with a database company and sell their products as an overall package, and they could be pushing the products of Oracle's competitors, who do not compete with them. ''They need to make a decision as to whether their applications business is going to reward them well enough to make up for the fact that it undermines their relationship with the package application vendors,'' Olofson said. ''Up to now, they have believed they can balance those things. Maybe they need to take a second look at that.'' From 'buy' to 'sell' All but two of 26 analysts who follow Oracle started the week with ''buy'' recommendations. Now all but three have downgraded the stock, although many say the company's long-term prospects are good. Investor attention in the short term is likely to focus on Oracle's competitors to see if they are benefiting from the giant's troubles or are suffering along with it. PeopleSoft, Baan and SAP, who report fourth-quarter earnings in the middle of next month, each lost only a few percentage points Tuesday. ''They see no sign of a slowdown,'' says Salomon Smith Barney software analyst Andrew W. Roskill. ''They seem very bullish for the outlook for the rest of year.'' Darby Dye, investor relations manager for Baan, agreed: ''We see nothing that would indicate that we're off-track.''

To: Sonki who wrote (4425)	12/11/1997 9:32:00 PM
From: Maverick	Respond to of 19080

Many analysts warn not to read too much into one quarter's performance by Oracle. ''I don't see anything in their product or business strategy that concerns me,'' said Carolyn DiCenzo, director of client server software for San Jose research firm Dataquest Inc. ''I see some experimentation in new business models in markets that are healthy for the company. I would not see this as a long-term problem. The good thing about Oracle is they know their business.''

To: Sonki who wrote (4425)	12/11/1997 9:38:00 PM
From: Xpiderman	Read Replies (1) \| Respond to of 19080

Yes, Sonki, I still have large position in SUNW, And added some ORCL lately. Still like INTC, AMAT, CSCO... ORCL:FIRSTCALL EARNINGS ESTIMATES ORCL Oracle Corp. 12/08/97 Industry: Software SIC: 7372 Latest Price: $32.38 1998 P/E: 29.4 Analyst Recommendation: 1.5 QTR QTR FY FY Feb 98 May 98 May 98 May 99 --- --- -- -- CURRENT MEAN EPS 0.25 0.47 1.10 1.41 Number of Brokers 25 25 26 23 Median 0.26 0.47 1.10 1.41 Standard Deviation 0.01 0.01 0.02 0.04 Current High 0.27 0.49 1.14 1.48 Current Low 0.24 0.45 1.07 1.31 Year Ago EPS 0.19A 0.36A 0.84A 1.10 Current vs. Year Ago Change 32% 31% 31% 28% Report Date wk/Mar 13 wk/Jun 17 wk/Jun 17 - EARNINGS ESTIMATE REVISION MOMENTUM Up Revisions last 7 days 0 0 0 0 Up Revisions last 30 days 1 2 2 0 Down Revisions last 7 days 1 1 1 0 Down Revisions last 30 days 2 2 3 1 EARNINGS ESTIMATES CONSENSUS TRENDS Current Mean 0.25 0.47 1.10 1.41 7-days ago Mean 0.25 0.47 1.11 1.41 30-days ago Mean 0.25 0.47 1.11 1.42 60-days ago Mean 0.26 0.47 1.11 1.41 90-days ago Mean 0.26 0.48 1.12 1.44 COMPARATIVE ESTIMATES AND TRENDS Industry - Software 77.08 77.17 288.88 364.53 Current vs. Year Ago Change 22% 26% 23% 26% Sector - TECHNOLOGY 9.40 10.84 38.77 48.17 Current vs. Year Ago Change 12% 17% 13% 24% WSJ/DJ US Index 11.01 12.22 45.41 51.59 Current vs. Year Ago Change 11% 14% 12% 14% Ratios Relative To: Company Industry Sector WSJ/DJ P/E on 1998 Cal Yr Mean 26.5 32.75 21.68 18.97 PEG on 1998 Cal Yr Mean 0.88 1.44 1.21 1.52 RECOMMENDATION AND GROWTH RATES RECOMMENDATIONS LONG TERM GROWTH RATES Current Mean 1.5 Next 5 yrs - Median 30% Number of Brokers 24 Number of Brokers 12 Industry Recommendation: 2.0 Industry Growth Rate: 23% 7-days ago Mean 1.5 Next 5 yrs - High 35% 30-days ago Mean 1.7 Next 5 yrs - Low 25% 60-days ago Mean 1.5 Last 5 Years 41% 90-days ago Mean 1.5 Diff. from Industry +0.5 Rel. to Industry 1.3 Diff. from Sector +0.5 Rel. to Sector 1.7 Diff. from WSJ/DJ US +0.7 Rel. to WSJ/DJ US 2.4 Transmitted: 12/09/97 08:58 (E_ORCL) SUNW:FIRSTCALL EARNINGS ESTIMATES SUNW Sun Microsystems, Inc. 12/08/97 Industry: Comp-wo IBM SIC: 3571 Latest Price: $40.88 1998 P/E: 18.2 Analyst Recommendation: 1.4 QTR QTR FY FY Dec 97 Mar 98 Jun 98 Jun 99 --- --- -- -- CURRENT MEAN EPS 0.54 0.58 2.25 2.72 Number of Brokers 25 25 25 21 Median 0.54 0.59 2.25 2.71 Standard Deviation 0.02 0.03 0.07 0.12 Current High 0.58 0.62 2.35 2.90 Current Low 0.48 0.52 2.00 2.35 Year Ago EPS 0.46A 0.51A 1.89A 2.25 Current vs. Year Ago Change 17% 14% 19% 21% Report Date wk/Jan 15 wk/Apr 15 wk/Jul 17 - EARNINGS ESTIMATE REVISION MOMENTUM Up Revisions last 7 days 1 0 1 0 Up Revisions last 30 days 2 0 2 0 Down Revisions last 7 days 0 0 0 0 Down Revisions last 30 days 1 1 0 2 EARNINGS ESTIMATES CONSENSUS TRENDS Current Mean 0.54 0.58 2.25 2.72 7-days ago Mean 0.54 0.58 2.25 2.72 30-days ago Mean 0.54 0.58 2.25 2.72 60-days ago Mean 0.56 0.60 2.34 2.87 90-days ago Mean 0.56 0.60 2.34 2.87 COMPARATIVE ESTIMATES AND TRENDS Industry - Comp-wo IBM 11.55 10.94 43.44 59.31 Current vs. Year Ago Change 14% 22% 21% 37% Sector - TECHNOLOGY 10.54 9.40 38.77 48.17 Current vs. Year Ago Change 12% 12% 13% 24% WSJ/DJ US Index 11.32 11.01 45.41 51.59 Current vs. Year Ago Change 10% 11% 12% 14% Ratios Relative To: Company Industry Sector WSJ/DJ P/E on 1998 Cal Yr Mean 16.5 19.37 21.68 18.97 PEG on 1998 Cal Yr Mean 0.82 1.03 1.21 1.52 RECOMMENDATION AND GROWTH RATES RECOMMENDATIONS LONG TERM GROWTH RATES Current Mean 1.4 Next 5 yrs - Median 20% Number of Brokers 22 Number of Brokers 6 Industry Recommendation: 2.1 Industry Growth Rate: 19% 7-days ago Mean 1.4 Next 5 yrs - High 20% 30-days ago Mean 1.5 Next 5 yrs - Low 15% 60-days ago Mean 1.5 Last 5 Years 42% 90-days ago Mean 1.5 Diff. from Industry +0.7 Rel. to Industry 1.1 Diff. from Sector +0.6 Rel. to Sector 1.1 Diff. from WSJ/DJ US +0.8 Rel. to WSJ/DJ US 1.6 Transmitted: 12/09/97 09:01 (E_SUNW)