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After Hours Action: Oracle, RIM

After the bell, the traders parsed through results from Oracle and RIM looking for trades. How should you position?

AFTER HOURS ACTION: ORACLE

Shares of Oracle popped in extended trade Thursday after the company reported profits that easily beat Street estimates largely due to surging software sales.

Specifically, the world's No. 3 software maker said sales of new software climbed 21 percent from a year earlier to $2 billion during its fiscal second quarter ended Nov. 30. (Three months ago, the company forecast that those sales would rise between 6 and 16 percent.)

Investors pay close attention to new software sales because they generate high-margin, long-term maintenance contracts and are a good gauge of the company's future profits

Looking at the numbers a little more closely Oracle reported a profit excluding one-time items of 51 cents a share in its fiscal second quarter, up from 39 cents a share last year.

What’s the trade?

With Oracle trading at $32 I think the stock remains cheap relative to its software peers, says Joe Terranova.

The thing with Oracle that always worries me is that they grow through acquisition and they’re one bad acquisition away from a problem, says Tim Seymour. I’m cautious.

I’d let the stock gap up and if Oracle holds that level, I’d buy into the strength, says Brian Kelly.

> Read More:
For additional information on Oracle’s earnings click here
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AFTER HOURS ACTION: RIM

Shares of RIM waffled in the aftermarket Thursday in the wake of earnings and revenue that beat Wall Street estimates.

"The only blemish in the current quarter was really the subscriber adds were a little light, but in terms of the outlook, revenue and EPS guidance are both ahead so this is a better report than most thought," says Matthew Thornton, senior analyst at Avian Securities.

By the numbers, the Blackberry maker reported fiscal third-quarter earnings of $1.74 a share. RIM earned $1.10 a share during the same period last year.

Sales for the most recent quarter rose to $5.49 billion, up from $3.92 billion last year.

The company was seen earning $1.65 a share on revenue of $5.41 billion, according to a consensus estimate from Thomson Reuters.

In addition, RIM boosted revenue guidance for the current quarter to between $5.5 billion and $5.7 billion. Earlier consensus was $5.46 billion.

RIM also said it expects to generate a profit of between $1.74 and $1.80 a share in its current quarter, above the $1.61 a share that 50 analysts who follow the company had expected.

The gross margin, or percentage of sales left after costs, widened to 43.6 percent last quarter, compared with an average analyst estimate of 42 percent. RIM said its margin should be similar this quarter.

What’s the trade?

For a trade I can see going into RIM short-term as a bet it takes out $65 but I wouldn’t buy RIM as a long term investor, says Joe Terranova. I’m concerned about margin erosion as they attempt to gain position in the emerging world.

I agree that margins may be compressed going forward, says Brian Kelly, but we haven’t seen it yet.

RIM isn't about this quarter for me, says Karen Finerman, it’s about what happens to their business in 2011. And I’m afraid of erosion. (According to a Bloomberg report, RIM’s share of the global smartphone market slid to 15 percent in the third quarter from 20 percent a year earlier, according to researcher IDC. Apple’s was unchanged at 17 percent while Samsung Electronics Co., which uses Android, jumped to 8.9 percent from 3 percent. )


Read More:
> For additional information on RIM earnings click here ---------

VISA MASTERCARD SELLING OFF

Investors slammed shares of Visa and Mastercard Thursday in the wake of a Federal Reserve proposal to force banks and card networks to slash the fees they charge retailers.

The Fed proposal would generally limit so-called debit "interchange" fees at 12 cents per transaction. The average interchange fee for all debit transactions was 44 cents per transaction in 2009, the banking regulator said.

What’s the trade?

No question there’s still a lot of uncertainty about how these developments will play out, says Tim Seymour. But considering the sharp sell-off, I can’t help but wonder how much is now priced in.

If you’re not holding Visa and Mastercard, now’s not the time to establish a position; I’d avoid both of these names, counters Joe Terranova. And if you are long I hope you’re holding puts.

If you’re holding Visa and Mastercard I’d get out now, adds Brian Kelly. There are much better places to put money to work.

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STREET FIGHT: GARTMAN VS. TERRANOVA

Gold closed down Thursday for the second consecutive session; and while Joe Terranova says this is the trade to short into 2011, commodities king Dennis Gartman is staying long.

“I wouldn’t be surprised that at some time next year gold trades to $1,600,” Gartman tells the desk. Meanwhile Terranova counters "the next $50 is to the downside."

Who make the better argument? Watch the video and find out now!

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ANALYZE THIS: ANDROID ATTACKS:

If you put your ear to the ground you may hear a lot of buzz concerning ‘the attack of the Android’. Though it may sound like a B-movie, the chatter is really all about Google and whether it’s Android platform is about to take over the smartphone trade.

What must you know and how should you position? Find out from top ranked Citi analyst Mark Mahaney. Watch the video now!




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Trader disclosure: On December 16, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Simon Baker owns (AAPL), (DE), (FCX), (GLD), (ORCL), (SLV) and (MRK). Joe Terranova owns (CRM), (VRTS), (C), (UPL), (PEP), (XBI), (GS), (OXY) and (NKE). Karen Finerman owns (BAC), (GOOG), (JPM) and (MSFT). Tim Seymour owns (AAPL), (BAC), (F), (GE), (UUU) and (MON).

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KAREN FINERMAN
Finerman's firm is short (IJR)
Finerman's firm is short (MDY)
Finerman's firm is short (SPY)
Finerman's firm is short (IWM)
Finerman's firm is long S&P puts
Finerman's firm is long Russell 2000 puts
Finerman's firm owns (ARO)
Finerman's firm owns (BBY)
Finerman's firm owns (GLW)
Finerman's firm owns (JPM) and (JPM) leaps
Finerman's firm owns (MSFT)

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (BBT)
Accounts Managed By Kanundrum Capital Own (DE)
Accounts Managed By Kanundrum Capital Own (JPM)
Accounts Managed By Kanundrum Capital Own (MCP)
Accounts Managed By Kanundrum Capital Own (TBT)
Accounts Managed By Kanundrum Capital Own (WFC)
Accounts Managed By Kanundrum Capital Own USD
Accounts Managed By Kanundrum Capital Own (SWC)
Accounts Managed By Kanundrum Capital Own (JJG)
Accounts Managed By Kanundrum Capital Own (JJC)
Accounts Managed By Kanundrum Capital Own (CLF)
Accounts Managed By Kanundrum Capital Own FXY puts
Accounts Managed By Kanundrum Capital are short the Euro

JOE TERRANOVA
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (ALK)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EPR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LPHI)
Virtus Investment Partners Owns More Than 1% Of (MGRC)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

BRIAN STUTLAND
Brian Stutland has no disclosures

SIMON BAKER
Baker Avenue owns (AAPL)
Baker Avenue owns (C)
Baker Avenue owns (DE)
Baker Avenue owns (FCX)
Baker Avenue owns (GLD)
Baker Avenue owns (IWM)
Baker Avenue owns (ORCL)
Baker Avenue owns (SLV)
Baker Avenue owns (MRK)

MARK MAHANEY
Citi Employees Own (GOOG)
Citigroup Global Markets Or Affiliates Owns 1% Or More Of (AKAM), (NFLX), (YHOO)
Citigroup Global Markets Or Affiliates Has Managed Or Co-Managed Offering Of (PCLN) In Past 12 Months
Citigroup Global Markets Or Affiliate Received Investment Banking Compensation From (PCLN) For Services Provided In Past 12 Months
Citigroup Global Markets Or Affiliate Received Non-Investment Banking Compensation From (MWW), (AMZN), (GOOG), (EXPE), (YHOO) In Past 12 Months
(PCLN) Is Or In Past 12 Months Was A Client Of Citigroup Global Markets
(MWW), (GOOG), (AMZN), (EXPE), (YHOO) Are Or In Past 12 Months Were Non-Investment Banking Clients Of Citigroup Global Markets (Securitites-Related Services)
(MWW), (GOOG), (AMZN), (EXPE), (YHOO) Are Or In Past 12 Months Were Non-Investment Banking Clients Of Citigroup Global Markets (Non-Securities-Related Services)
Citigroup Global Markets Is A Market Maker In (MWW), (AKAM), (OPEN), (GOOG), (PCLN), (AMZN), (EXPE), (YHOO)
Citigroup Global Markets Has A Significant Financial Interest In Relation To (GOOG), (AMZN), (EXPE), (YHOO)
Citigroup Global Markets Or Affiliates Owns 5% Or More Of (YHOO)

MICHAEL RYAN
(AAPL) Is Or In Past 12 Months Has Been A Client Of UBS Securities LLC (Non-Securities Services)
UBS Securities LLC Is A Market Maker In (AAPL)
UBS Securities LLC Has Received Non-Investment Banking Compensation From (AAPL) In Past 12 Months
(AAPL) Is Or In Past 12 Months Has Been A Client Of UBS Financial Services (Non-Investment Banking, Securities-Related Services)
UBS Financial Services Has Received Non-Investment banking Compensation From (AAPL) In Past 12 Months

DENNIS GARTMAN
Funds Managed by Dennis Gartman are short the euro
Funds Managed by Dennis Gartman are long gold

TIM SEYMOUR SOT
Tim Seymour has no disclosures on the date of the SOT

EMMA SUGARMAN
Emma Sugarman has no disclosures

JASON KUPFERBERG
(V) Is Or In Past 12 Months Was An Investment Banking Client Of UBS Securities LLC
(V), (MA) Is Or In Past 12 Months Was A Client Of UBS Securities LLC (Non-Securities Services)
UBS Securities LLC Has Received Compensation From (V), (MA) In Past 12 Months



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