Oracle ( ORCL) faces an unusual problem when it releases earnings later Thursday: Too much optimism, and it risks sparking a rally in the stock of a company it is trying to acquire. It shouldn't be too tall an order. "This looks to be the most underwhelming Oracle fourth-quarter in memory," said Cheng Lim, who follows Oracle for Fulcrum Global Partners. (Fulcrum does not do investment banking.) Lim and many other analysts are focused on Oracle's hostile $5.1 billion bid to buy PeopleSoft ( PSFT), which is itself attempting a friendly takeover of rival software maker J.D. Edwards ( JDEC). (PeopleSoft said Thursday its board voted unanimously to recommend that stockholders reject Oracle's takeover bid. Oracle
responded expressing disappointment in the action.) Lim is a little less positive about the quarter than the Wall Street consensus, but both expect year-over-year revenue to decline a bit, while earnings increase modestly. Analysts polled by Thomson First Call expect the company to earn 14 cents for the quarter ended May 31, compared to 12 cents a year ago, and they expect total revenue of $2.75 billion, down from $2.77 billion last year. Among the key indicators: new license revenue from databases and applications as well as deferred revenue, all of which give an indication of how much new business the company is generating.