Disappointing earnings sent Oracle down over 9% last week. One analyst says a couple big announcements may change things for the stock.
Friday was a tough day for Oracle shareholders. The company's stock fell more than 9% after the infrastructure software giant reported disappointing earnings Thursday after the bell. The culprit, according to CFO Safra Catz, was weakened demand in Latin America and Asia. Though it also announced it was doubling its dividend to $0.12 per share, that was not enough to attract buyers to the stock.
It was the second time this year Oracle came in with lower-than-expected numbers. Back in March, the company missed analysts' estimates by $0.01 per share and reported $400 million less in revenue than the $9.4 billion anticipated by Wall Street. That punished Oracle's stock by more than 12% but shares slowly inched back up only to get knocked down again on Thursday.
Yet during the course of the analyst conference call accompanying the earnings release, CEO Larry Ellison slipped in that Oracle will soon announce new partnerships with Microsoft, Salesforce.com, and Netsuite. The latter two already have deals with Oracle. Ellison indicated that the partnerships will involve implementation of Oracle 12c, the cloud database launched this past October.
On Friday, Microsoft issued invitations to a press conference with its CEO Steve Ballmer and Oracle President Mark Hurd.
Will these announcements be enough to push Oracle's stock back up? We ask Patricia Edwards, Principal and Chief Investment Officer of Trutina Financial, and CNBC contributor Abigail Doolittle, Technical Strategist at The Seaport Group, to look at the fundamentals and technicals.
Edwards is long the stock and says that nervous investors should "wait and see" before thinking of exiting the stock. Doolittle believes the company's performance a couple of years ago is indicative of where it's going.
Who is right? Watch Edwards and Doolittle on what's next for Oracle, watch the video above and decide for yourself.
- Investment & Company Information