Analysts Seem Flustered with Rare Oracle (ORCL) Miss

Oracle (Nasdaq: ORCL) shares are trading 13.6 percent lower Wednesday following a second-quarter earnings miss and light outlook. Click here for more on that.

Analysts weigh in:

• Goldman Sachs commented: "For the first time since November 2008 (and only twice in the prior 26 quarters), the company came in below the low end of its guidance range for both total revenue and EPS...License sales also posted results below the low end of the guidance range (+2% vs. guidance of +6%-16%) for only the fourth time in 22 quarters."
  
  Goldman believes third-quarter guidance isn't conservative.
  
  The firm sees fiscal 2012 EPS at $2.37, down from a prior $2.44, and also cut its license growth outlook from 10 percent to 8 percent.
  
  
• Deutsche Bank is maintaining a bullish stance on Oracle, saying verticals came in artificially low. "We believe that as sales cycles were elongated due to extra levels of customer required approvals, numerous deals pushed into 3Q through artificially depressed closure rates at the end of 2Q. Outside of the severely contracting macro environment of the last recession, it is rare to see such low growth rates for all geographic regions. This leads us to believe that 3Q numbers could actually be conservative."
  
  Deutsche still likes M&A of SaaS companies as a way to fight reverting to its natural growth rate of about 5 percent.
  
  Estimates have changed: third-quarter EPS from 58 cents to 56 cents, revenue from $9.409 billion to $9.050 billion.; fourth-quarter EPS from 75 cents to 73 cents, revs from $11.618 billion to $11.341 billion; fiscal 2012 EPS from $2.38 to $2.32, revs from $38.700 billion to $37.600 billion.
  
  
• Well Fargo said, "Oracle said many deals slipped because customers required additional approval sign-offs. Rather than blaming the economy, Oracle said execution around deal closings was the bigger culprit."
  
  The firm did a great job of summarizing what Oracle reported...and that's about it. So we'll skip to its outlook. Wells Fargo sees license growth of 0 percent, sales growth of 1.4 percent, hardware consolidation of 15 percent, and EPS of 55 cents.
  
  
• Collins Stewart is struggling with whether the miss was Oracle-specific, or more related to the environment. On the environment, Collins thinks IT spending has been weak. Otherwise, the firm said Oracle "has seen SAP post better organic constant currency license growth recently for the first time since 2008. In addition ORCL indicated that the hardware miss was attributable to product transition issues in the Sparc line."
  
  The firm is modeling for third-quarter revenue of $9.201 billion and EPS of 57 cents.

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