The Night Watch: Oracle Comes To the Rescue of the Tech Sector
Tech stocks got a bold lease on life after
Oracle
(ORCL) - Get Report
posted fourth-quarter earnings that beat analysts' expectations by a penny a share, describing its latest report as "a pretty good financial result in this difficult economic climate."
Indeed, Oracle's results galvanized tonight's extended hours, which saw heavy volume on both
Instinet
and
Island
. And as the most heavily traded stock on both platforms, the world's second-largest software company recently gained 8.6% to $16.12 on Instinet and 8.6% to $16.11 on Island.
Other blue-chip tech outfits from
Cisco Systems
(CSCO) - Get Report
to
JDS Uniphase
(JDSU)
gained upward momentum as bulls charged to the tune of Oracle's better-than-expected earnings on relatively healthy volume.
In a press release issued after the bell, Oracle
reported fourth-quarter earnings of $855 million, or 15 cents a share, down from $925.9 million, or 15 cents a share, in the same period last year. According to analysts polled by
Thomson Financial/First Call
, 32 analysts expected earnings of 14 cents a share for the quarter. Oracle also posted sales for the quarter of $3.26 billion, compared with last year's $3.37 billion. Analysts on average expected fourth-quarter revenue of $3.36 billion.
Also rising in tonight's extended session was Oracle rival
Siebel Systems
(SEBL)
, up 4.2% to $39.88 on Instinet, and
BEA Systems
(BEAS)
, which climbed 1.9% to $30.38 on Island. Both had ended the day in the red as the Street struggled with profit concerns and a softening economy.
And
Honeywell International's
(HON) - Get Report
latest statement, which reaffirmed its commitment to the merger deal with
General Electric
(GE) - Get Report
in the face of mounting opposition by the European regulatory commission, boosted its stock in the after-hours. The company said it expects that GE will do "everything possible to secure regulatory approval for the transaction" and saw its shares climb 0.4% to $40.15 on Instinet.
The phalanx of lowered earnings marched on tonight with
Metromedia Fiber
(MFNX)
guiding down its 2001 revenue forecast, citing the mantra of "general economic weakness and the market downturn." The company, which operates fiber-optic networks, said it sees 2001 revenue of $400 million to $420 million, compared with $463.9 million, as polled by analysts on average.
Nevertheless, investors voted up the shares, which climbed 3.8% to $2.18 on Island. Rival
Level 3 Communications
(LVLT)
, which reached a new 52-week low of $5.95 during regular trading today, found reprieve on Island, rising 2.2% to $6.10. But on Instinet, they fell 0.2% to $5.96. Level 3 issued its own earnings warning this morning, which
put a drag on other network builders.
But telecom woes plagued fellow broadband provider
360networks
(TSIX)
tonight, which lately gave up 6.3% to 30 cents on Island. The cash-strapped company recently announced it had canceled plans to buy Internet services company
NetRail
, amid a deluge of debt and and the fact that its global fiber-optic network is still incomplete. The shares are sharply off their 52-week high of $24.19. Last Friday, the company said it was not going to make $10.9 million in interest payments on its $175 million 12.5% senior notes, and that it was mulling restructuring, according to a report by
Reuters
.
Island ECN offers trading mainly in Nasdaq-listed stocks, from 7 a.m. to 8 p.m. EST.
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TheStreet.com
explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.