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Two Ways: Oracle Calls for Bright Future

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Strengthen your portfolio in good times and bad.

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Oracle (ORCL) came out with fourth-quarter earnings after today's closing bell. The world's second-largest software-maker said it earned $0.46 per share, besting consensus estimates of $0.44 per share. Revenues fell 5.2% year-over-year, to $6.86 billion, beating expectations of $6.47 billion.

Jeff Epstein, Oracle's chief financial officer, said the company "executed substantially better than we expected on both the top and bottom line for the quarter… We grew Q4 non-GAAP operating margins by a faster-than-expected 240 basis points to over 51%. That helped us generate $7.7 billion in free cash flow for fiscal 2009."

Although fiscal 2009 earnings were up 3% in 2009, to $1.09 a share, the firm was hurt by a weaker dollar, which reduced EPS by $0.11 per share. Annual non-GAAP revenues were still up 4%, to $23.5 billion, due in part to a strong performance in its Exadata Database Machine, which CEO Larry Ellison said was "well on its way to being the most successful new product launch in Oracle's 30-year history."

Shares rose nearly 2.5% in after-hours trading.

From the Bull Pen: Oracle is definitely an option if you favor these big-cap tech plays. Near-term sell stops can be set below $19.50 support.

From the Bear Cave: In tech, bears can look to Baidu (BIDU). Consider playing the downside if you think this stock has more room to correct. Watch if the stock rallies back and fails at $280-282 -- remember to set a tight buy stop above that level.

It's time to share an Abita with my former teammate Minyan B.Hocke. Have a great night!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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