Oracle Gives Tech Stocks A Much-Needed Boost
The company beat estimates by a penny with earnings of 15 cents a share, down from 82 cents a year ago (a quarter that included a large investment gain that unnerved investors at the time). Revenues came in about $90 million shy of estimates at $3.26 billion, but given that everyone was expecting Oracle to warn three weeks ago, that too was viewed favorably.
But more importantly, the company said it feels it hit bottom last quarter. Visibility is still limited, but Oracle said it expects to meet expectations for its fiscal first quarter (ending in August) of 8 cents a share, down a penny from a year ago. CFO Jeff Henley said there could be more upside than downside to those numbers, another positive departure from the tone of recent conference calls. But Oracle doesn't see a return to strong growth until the end of the year.
CEO Larry Ellison was his old brash self, claiming that the implementation of Oracle's E-Business suite at more than 400 customers in the last year will strengthen its position in the applications business going forward, and he took shots at competitors like Microsoft and IBM by name.
As a result, the stock was up more than 10% in premarket trading, and Nasdaq futures were up more than 50 points.
The stock may gap up over its 50-day moving average at 16.42 and resistance at 17 when it opens for trading (see chart below), both hopeful signs. But then it runs straight into a nasty island reversal gap from 17.15 to 19.75 (the black arrow). And the stock's indicators have all been pointing toward a new trend down. That's a lot of resistance to overcome wherever it opens this morning.
It's amazing what passes for bullish in the technology sector nowadays. But under the circumstances, we'll take it.
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