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Guest Post: Oracle's Blowout Quarter... A Lagging Indicator?
Submitted by Logical Thought
Oracle's Blowout Quarter... A Lagging Indicator?
In light of the obviously weakening macro data these days (most
recently, the latest reports from FedEx and the Philadelphia Fed), I
found Thursday night's earnings release from Oracle (ORCL) to be suprisingly strong. In that context, how does this headline sound:
"Oracle Reports Net Income Up 111%... Application Sales Up 42%, Database Sales Up 32%"
And how about this quote from Larry:
"We are off to our fastest start in six years," said Oracle CEO, Larry
Ellison. "The spectacular growth in our database business demonstrates
that we are continuing to take market share from IBM and Microsoft.
The world's largest Web sites — from Amazon.com to Yahoo! — rely on the
Oracle database to handle huge numbers of users and enormous
quantities of information. The Oracle database is the software that
powers the Internet."
And how about this quote from the CFO:
"... we are seeing the sales and marketing productivity gains that
should accelerate revenue growth throughout [this fiscal year}... It
should be a great year."
Want to guess when this press release
was from? September 14th, 2000. The stock closed that day at $42.47. On
the date of the next earnings release, three months later, it closed at
$27.50. In the earnings release three months after that (March 1, 2001)
Larry had this to say:
""License growth was strong in the first two months of Q3, and our
internal sales forecast looked good up until the last few days of the
quarter," said Oracle CEO Larry Ellison. "However, a substantial number
of our customers decided to delay their IT spending based on the
economic slowdown in the United States. Sales growth for Oracle
products in Europe and Asia Pacific remained strong. The problem is the
US economy."
The next day, the stock closed at $16.88.
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i particularly liked that Mark Hurd move they pulled off. he gets himself fired from HP for a sex scandal and immediately defects to Oracle. well played, we can only speculate if he stirred up the whole thing on purpose to get a 50 meg severance and free himself from any contractual limitations prohibiting him from joining competitors. its not like you cant settle a sex harassment case out of court without media getting involved if the price is right. but did he want to?
The woman involved has a few porns from way back. A sex scandal with her, comeon.
links please
Links, yes. Youporn? Redtube?
My "favorite" Hurd item is this line from last weeks ORCL earnings press release:
"...said Oracle President, Mark Hurd. “We will invest over $4 billion in research and development this year, so our already robust product portfolio is only going to get stronger.”
Lol, this is the guy who completely GUTTED the fabulous R&D department at HP! Clearly, we know who "wears the pants" (or, should I say, "sailing shorts"?) at Oracle.
sex scandal had nothing to do with it. Neither did his expense accounts that were the documented reason for the firing.
The board grew tired of his canabalizing cost cutting, HP is a shell of a company and it wouldnt surprise me to see them as another POS aquisition by someone in 5 years. Anyone intelligent that worked there left a long time ago.
Oh good...another chance to say, Oracle SUCKS! It made my life a living hell for 3 years.
Did they just violate your computers or did they abuse your brain?
'Logical Thought', have you ever had a close relationship with a corporate comptroller in a large corporation? One in which he told you some dirty little secrets?
You may want to develop one.
I'm not sure that I follow your line of thought there, 4th Quadrant.
By the way, this article is NOT a knock against Oracle or Ellison (who's clearly a brilliant business guy). My point is that the awful macro data we've been seeing recently will inevitably catch up to the "micro earnings stories", and if that happens, current stock prices will be unsustainable.
Cisco is a railroad company.
Google is a billboard company.
Oracle is a bookshelf company.
Microsoft is an office stationery company.
Apple is a publishing company.
Now were is the dividend from all these utility/"cash cow" businesses??
What's a "dividend"? You springing new terminology on us?
Fact: many listed tech companies are hoarding cash. But why?
Because they are running out of ideas to invest in.
This is a characteristic of utility companies.
And from utility companies, such as electricity companies, one should expect steady dividends....
That "cash" thingie is a bit misleading. It's mostly in the form of debt as opposed to retained earnings. That's not good and does not make a company likely to issue dividends based on a debt laden balance sheet. That would be like my borrowing money and handing it out to my neighbors so I look prosperous.
I think you need to go back and look at the balance sheets for these companies... Your comment is way off for Apple and Cisco.
Thank you for that. I can accede to two companies. Their real cash is what percent of all the "cash" of total company balance sheets? Putting the cash of these 2 companies into perspective would be helpful in advancing the argument.
They are running the clock. We're not talking about some shit hole accounting firm. Thank Christ most of these asswipes are too dumb how to make money in their semi-aspergers way. Pull the money from them, they rot. Usually they beg, in Canada they wait for the Insurance to run out. Then you give them lot less than they left for and it's begged for.
So they are all banging the walls 'In Cash', who gives a shit. If you ran a business, you would understand how fast you run out of money. It easy, all it takes is a fire in the can, some one of your employees to fuck someone in staff equals baby(as there is already a family around), or my favorite: just plain nuts.
Let's see how random assholes (employees) make this situation work out shall we?
Apple has always been cash rich. Back when I had the misfortune of neglecting to buy it hand over fist (at a whopping $4 a share), it was common knowledge that they had a minimum of $4 BILLION in liquid assets. They are a rarity to be sure, but I wouldn't read too much into their hording their dough at this point. If anything I'd be more concerned that they have allowed their share prices to become so unaffordable. Traditionally (as in previous to this last decade) they've had splits to keep their share price between $35-$60.
-Oz
Apple has always been a joke of a company and it should have gone bankrupt in the mid 1990's. Then that ridiculous transparent iMac came out. If Jobs ever goes down, Apple is Toast.
I have siad that for a while about Apple. Not to discount the possibility of some great leap forward in some as yet unimagined consumer technology (but who has money to pay for it?), there aren't alot of revolutionary advances Apple can announce. Hence their sort of murky entry into the TV market, and pay per view tech over the internet. Isn't that the same as cable? And these days I get the impression that TV is essentially free when you buy bundled phone and internet, so why pay again for shows you can DVR and watch whenever you want? And internet TV on your PDA is just plain silly.
Fact: many listed tech companies are broke. They all went broke during the dot com bust. They just won't admit it.
Microsoft claims to have 23 billion in cash in 2008. Then it goes to bond market to suck up 3.5 billion just before the release of windows 7. Then it goes to bond market this year to suck up 1 billion after claiming 150 million sold copies of windows 7.
Now it's out there bragging about making 200 millon from some new halo piece of shit game for their little xbox thingy and how much ass kicking that is compared to any movie opening or anything else.
Fact the 2nd place companies are bankrupt. The 1st place companies are a completely different kind of bankrupt. The 3rd place companies are where stuff wll come from after gold bombs the entire western civilization, the IMF and the Bank of International Settlements into oblivion.
"Diabolical Ellison"
A go to strategy in a downturn, appearently even at the start of the mother of all downturns, is to buy/build technology capital investments to replace the need to feed carbon based life forms. I was in Silicon Valley in '82. I could not understand all the doom and gloom I read about happening elsewhere. Things were booming.
Oracle will have a difficult times after all those acquires and big spendings. They have a big pressure from an open-source-based solutions for distributed data management - Facebook, Google, Amazon developed their own in-house solutions, an a lot of people are trying to adopt this strategy by reusing open-source components as a building blocks.
I recommend to sell. ^_^
Oracle is getting into the hardware business.
HP and Dell's server business is vulnerable to a one shop solution.
Watch CTXS.
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