Oracle Traders Giveth, Taketh Away

Easy come, easy go, I suppose, when it comes to Oracle. The company barely had enough time to finish that first glass of champagne, celebrating a great fourth quarter when gloomy guidance cut the party short.

Oracle's headquarters in Redwood City, California.
Paul Sakuma
Oracle's headquarters in Redwood City, California.

On the conference call, co-president Safra Catz lowered the boom, projecting 18 percent year-over-year revenue growth, putting the topline near $5.42 billion, and earnings per share of 17 or 18 cents. Consensus is at 27 cents on $5.47 billion. Ouch.

On the call, Catz says things still look very good, that deals are moving along. But not enough to close the gap between Oracle's expectations and those on the Street.

The company will tell you that August is always like this. Slow. That this is a dead time of year; that sales folks head off to off-site gatherings, or go on vacation. And that would ring true, to a certain extent, if the company hadn't posted 35 percent growth during this period last year.

Still, there were some on the Street hoping that BEA's contributions would offset that expected drop off, that Oracle would carry over certain deals that almost closed but didn't into its next quarter. That doesn't seem to be happening.

Still, you have to remember how conservative this company can be when it comes to guidance (just look at this quarter as an example.) Couple that conservative guidance with a blockbuster report today, strong sales in North America, a pretty good macro outlook despite deep worries to the contrary, and Ellison might be ripping a page from his old buddy Steve Jobs' playbook. Or is the other way around?

Either way, Oracle shares are giving back the rally they enjoyed when the numbers came out. I suspect they'll find a way to rally again. And soon.

Questions? Comments?