Oracle Corporation shares plunged $3.18, or over 8%, Thursday to close at $36.56, after Paine Webber Inc. analyst John Faig cut the database software company’s 1998 earnings estimates to $1.60 a share from $1.70, and the stock was cut to hold from strong buy by analyst Joseph Farley at UBS Securities Inc. Oracle senior VP server technologies Jerry Held assured our sister paper Unigram.X only two weeks ago that the naysayers would be proven wrong, predicting the company’s European and tools businesses would show an upturn this quarter, and that he believed Oracle to be diversified enough across product lines and geographies that it should be able to withstand a knock or two without customers, shareholders or Wall Street reaching for the panic button. Well, no-one told Wall St. The softness seems to have been prompted by concerns that Europe will in fact still prove lackluster. While revenues in the Americas region soared 49% to $667 million in the company’s second fiscal quarter to the end of November, and Asia/Pacific sales jumped 44% to $208 million, Europe looked markedly weaker. Revenues in the region rose from $376 million to $436 million, a 16% growth rate that compares with the 32% pace recorded at Oracle Europe in fiscal 1996. Most observers attribute the problem to confusion in the region over the company’s summer 1996 reorganization which was designed to eliminate duplication of management structures across national boundaries. However, the move, which in the US was presented as a sensible shuffling into vertical teams, was resented by ousted Euroexecs and apparently customers too. The European slowdown blotted Oracle’s copybook worldwide, revenues for the quarter growing only 36% to $1.311bn instead of the 42% reported in Oracle’s fiscal 1996. Computer Associates shares fell by $3.88, or nearly 9%, to $40.13 in what analyst we spoke to characterized as guilt by association. Its third quarter (ending December 31st) saw a slip from its habitual 15-25% growth rate, with a $146m loss on $1.05bn revenue, with a lot of the fault being blamed on unimpressive sales of its CA-Unicenter systems management product. An Oracle spokesperson had no comment.
