Business software maker Oracle Corp. is scheduled to report its fiscal first-quarter results on Thursday. The following is a summary of the key issues likely to affect the stock market's reaction to the results.
OVERVIEW: Oracle has been on a roll for the past year, but the company raised concerns of a slowdown in late June when management provided a cautious sales outlook for the summer. Management projected a 10 percent to 20 percent gain in new software licenses for the three months ended Aug. 31, down from 35 percent growth in the same period the previous year.
The worries about Oracle have intensified as more beleaguered banks retrench, fail or get bought by healthier rivals. The shakeout, triggered by an avalanche of bad home loans, threatens to hurt Oracle because the Redwood Shores, Calif.-based company sells a lot of software to the financial services industry.
Oracle's earnings also could be trimmed by the stronger dollar. Like other major technology companies that generate significant sales outside the United States, Oracle had been getting a lift from the weaker dollar. With the dollar strengthening in recent months, Oracle now faces a currency headwind that probably will curtail its earnings growth.
All these concerns have caused Oracle's stock price to fall by about 15 percent since the quarter ended.
BY THE NUMBERS: Analysts surveyed by Thomson Reuters expect Oracle to post income of 27 cents per share, excluding expenses for employee stock options and acquisition costs. Analysts forecast revenue of $5.42 billion.
ANALYST TAKE: After talking to software vendors and buyers, JMP Securities analyst Patrick Walravens concluded Oracle's first-quarter results and second-quarter outlook are likely to disappoint. "The overall tone from our industry sources is decidedly negative," he wrote in a research note earlier this month.
Nevertheless, Walravens thinks Oracle might have been able to soften the blow to...

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