This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Sun's a Hot Potato for Oracle

Updated from 11:48 a.m. EDT

Database giant Oracle (ORCL - Get Report) will have a major challenge breathing life into Sun Microsystems' (JAVA) ailing business, if the server and software firm's third-quarter results are anything to go by.

The Santa Clara, Calif.-based firm posted a widening loss and saw its sales plummet well below analysts' estimates when it released its figures Tuesday.

Oracle sent shockwaves through the tech sector earlier this month when it threw down $7.4 billion to purchase the beleaguered tech giant, which had also been a target for IBM (IBM - Get Report).

Sun faces multiple challenges as it enters its last few months as an independent entity. Like the rest of the tech sector, the company is wrestling with an extremely difficult economy, and Sun's many rivals are looking to exploit the uncertainty that has surrounded the comany. To make matters worse, the third-quarter results also suggest that customers are sitting on their hands until Oracle CEO Larry Ellison unveils his grand vision for Sun's products.

"Weakness in the company's high-end servers is bleeding into its midrange and x86-based servers as well," wrote David Bailey, an analyst at Goldman Sachs, in a note released Wednesday.

Although Sun reduced its operating expenditure by 15% year over year, the firm's operating expenditure as a percentage of revenue increased by 3 percentage points, thanks to plunging sales. Citing that these trends are likely to continue, Goldman Sachs lowered its estimates for Sun, with the company now expected to post a loss of 50 cents a share in 2009, down from the previous estimate of a 16-cent loss. For 2010, the analyst firm predicts earnings of 11 cents a share, compared to its prior estimate of 25 cents a share.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
IBM $160.52 -1.30%
ORCL $43.16 -0.64%
AAPL $124.49 -1.50%
FB $82.16 -1.20%
GOOG $548.46 -0.65%


DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs