The Best Thing About Oracle's Statement Was What It Didn't Say - TheStreet



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is going to warn that it missed Wall Street estimates for its fiscal fourth quarter, it'll have to do so before June 18. Because Friday it scheduled its quarterly conference call for that date, instead of issuing the earnings warning everyone was expecting.

Of course, not warning now doesn't mean Oracle couldn't preannounce later. But companies usually wait to figure out what their numbers are going to be before scheduling their conference calls with analysts. Because Oracle went ahead and did that, Wall Street is now presuming the company does know. Because it didn't warn, the Street is taking its thinking one step forward, and supposing the company made the cut.

"I think you have to assume that by putting out the date for the call, especially after the way it was handled last quarter, that they met or came close to meeting the consensus estimates that were out there for them," says Jim Pickrel, an analyst at

JP Morgan H&Q

, who rates the stock outperform. (His firm hasn't done underwriting for the company.)

On March 1, the day after its fiscal third quarter closed, Oracle

shocked Wall Street by saying it didn't make its numbers, even though executives had been bullishly touting the company's prospects just days before.

Investors ultimately will have to wait until Monday morning to see how the lack of news affects the stock in regular, full-volume trading, but after hours, things were looking good for Oracle shares. After closing up 56 cents, or 3.6% at $15.86 during Friday's regular session, they zoomed to $16.25 on


ECN. That action reflects what some analysts were saying about Oracle at the low to midteen levels -- that it was a stock waiting to be bought.

Again, the silence doesn't mean everything's golden at the database and enterprise software giant. Oracle could have made its EPS number -- consensus is 14 cents, according to

-- while still missing overall revenue expectations of $3.36 billion. The company announced some layoffs during the quarter, and many analysts speculated that there were more layoffs that went unannounced, as well as other cost-cutting measures that could have helped Oracle make the bottom line.

For sure, though, there were few out there who believed things are all rosy. The 14-cent consensus earnings number is actually a penny lower than the guidance Oracle gave after its fiscal third quarter. During this past quarter, speculation on slow sales and massive price slashing by the company ran rampant on Wall Street.

And whatever the case, don't expect a quarter without some "hair" on it. After all, when Oracle missed the expected sales numbers for its business applications software during its August quarter in 2000, the company didn't say anything beforehand. Similarly, if it missed its database number this time, a concern many analysts have had, it wouldn't necessarily need to disclose that before its June 18 call.

Yet, if there is a significant gap between Oracle's numbers and investors' expectations, the company would be crazy not to get the news out as soon as possible. After all, in this who-can-I-blame-for-the-money-I-lost-in-the-stock-market era, companies are being extra careful to get all the information out.

Maybe Oracle did pull things off. The company's quarters are notoriously back-end loaded, meaning the lion's share of business comes in the closing weeks or even days of the period. While it seemed like wishful thinking, there was chatter on Friday that the company closed a major, quarter-saving deal Thursday night.

The lack of a warning could very well have a positive effect on other software stocks next week, just as Oracle's warning last quarter cut the legs out from underneath its peers. Analysts, though, cautioned Friday that any run-up before June 18 could be given back when Oracle details its results.

"There are just some pretty choppy waters throughout all of tech right now," JP Morgan H&Q's Pickrel says. "You could see other stocks rally a bit, and then have the Oracle numbers come out and have revenues be down 9% to 10% year over year, and have them forecast guidance down even more. I don't know if that is the case, but I certainly list it as a possible scenario. If that's how the June 18 call goes, then it wouldn't be good for the sector as a whole."

Got that? Seems like no news is news.