Oracle (ORCL) Stock Down After Losing Server Case to Hewlett Packard
NEW YORK (TheStreet) -- Oracle (ORCL) - Get Report stock is falling 0.51% to $40.72 in pre-market trading on Friday after the enterprise software company was ordered to pay $3 billion in damages to Hewlett Packard Enterprise (HPE) after losing a case over Hewlett-Packard's Itanium servers.
Shares of Hewlett Packard are rising 1.26% to $18.50 in pre-market trading this morning.
Hewlett Packard sued Redwood City, CA-based Oracle for allegedly breaching a contract that stated Oracle would provide supporting software for Itanium servers, Reuters reports.
Oracle claims that it was not an indefinite contract and that the Itanium servers made by Intel (INTC) were nearing the end of their life. Intel was focusing on x86 microprocessors instead of the Itanium-based servers.
In 2012, Santa Clara Superior Court Judge James Kleinberg ruled that the contract was breached. On Thursday, a jury decided the damages would be $3 billion, Reuters added.
Oracle has been providing support for the servers since the first ruling and plans to appeal both rulings, Oracle General Counsel Dorian Daley said in a statement.
Separately, Oracle has a "buy" rating and a letter grade of B+ at TheStreet Ratings because of the company's increase in net income, reasonable valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share.
You can view the full analysis from the report here: ORCL
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.