Oracle Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of business software giant Oracle (Nasdaq: ORCL  ) could use some sage advice today after falling as much as 14.6% on downright epic trading volume.

So what: Last night's second-quarter report just didn't measure up to Wall Street expectations. Oracle reported $0.54 of non-GAAP earnings per share on $8.8 billion in sales, falling short of the $0.57 and $9.2 billion respective consensus targets.

Now what: At least three analysts downgraded Oracle shares or slashed price targets, noting that the company is "behind the curve" in cloud computing and waiting in vain for hardware orders to roll in. The market took this report as generally bad news for enterprise computing, giving IBM (NYSE: IBM  ) a 4.3% intraday haircut and TIBCO Software (Nasdaq: TIBX  ) a dramatic 14.9% drop.

TIBCO reports earnings tonight, and will give us more clues about the health of the software industry. Frankly, I expect TIBCO, Big Blue, and others to do well in spite of Oracle's weak mojo. The company made some questionable business decisions nearly three years ago that are coming back to haunt it today.

Interested in more info about Oracle? Click here to add it to My Watchlist.

Fool contributor Anders Bylund holds no position in any of the companies mentioned. The Motley Fool owns shares of Oracle and International Business Machines. Motley Fool newsletter services have recommended buying shares of TIBCO Software. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.


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  • Report this Comment On December 21, 2011, at 2:45 PM, abierce121 wrote:

    No, buying Sun does not remotely account for across-the-board dips in software and service revenues. This suggests it's not an Oracle-specific slowdown due to "questionable business decisions" three years ago. But we'll see.

  • Report this Comment On December 21, 2011, at 4:47 PM, Marshisamerican wrote:

    Oracle looks very promising, and today gave us a great opportunity. RSI hit below 30 today, According to the Williams %R it is under 20% and the ADX shows we are looking at a weak trend that occurred today, not even nearly close to what we saw shares mid August. MFI is also in oversold territory (23). ADL spiked bullish like crazy today (which is a great sign) MACD crossed over signal line today. All in all earnings misses rarely affect the stock for more than a day or two. I see shares jumping $5-7 in the next 3-8 market days.

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