Oracle and Lennar Earnings Drag Stocks

123jump.com Staff
27 Mar, 2008
New York City

U.S. stocks at the opening traded lower after another round of lowered earnings estimates, loss at home builder Lennar, and Oracle reported lower than estimated earnings. Nasdaq and S&P 500 tracked lower on weak technology stocks. Lennar swung to a quarterly loss on 64% decline in revenue. Fourth quarter GDP rose at a seasonally adjusted annual rate of 0.6%. Stocks in Shanghai fell 4% but better than expected earnings in Hong Kong reversed earlier losses. European markets are trading up.

[R]10:00AM New York – Financial stocks drag stocks at the opening in New York.[/R]

Financial stocks were under pressure in the first thirty minutes of trading after Oppenheimer analyst Meredith Whitney lowered earnings estimates for Merrill Lynch and UBS this morning.

The Commerce Department reported fourth quarter GDP growth at an annual rate 0.6% and weekly claims of unemployment at the end of last week fell 9,000.

ConAgra sold its trading unit to hedge fund manager Ospraie Management for $2.13 billion. ConAgra((CAG)) jumped $1.33 to $23.23 in the morning trading.

Oracle Corporation ((ORCL)), an enterprise software developer said revenue for third quarter ended February 2008 increased by 21% to $5.3 billion. Third quarter ended net income was $1.3 billion or $0.26 per diluted share compared to $1.03 billion or $0.20 per diluted share for the same quarter of 2007.

Total software revenues were up 21% to $4.2 billion and new software license revenues up 16% to $1.6 billion. Database and middleware new license revenues were up 20% and applications new license revenues were up 7%. Software license updates and product support revenues were up 25% to $2.6 billion. Service revenues were up 21% to $1.1 billion, compared to the same quarter last year.

Oracle expects net income of 43 cents or 44 cents per share in the fourth quarter, excluding one-time charges, and sales are expected to increase 15% to 19% from a year ago.

Oracle's latest acquisition was the $8.5 billion takeover of rival BEA Systems Inc. BEA was Oracle's most expensive purchase since it paid $11.1 billion for PeopleSoft Inc. in early 2005.

Oracle ((ORCL)) fell $1.44 to $19.48 in the morning trading.

Lennar Corporation ((LEN)), Miami, Florida based homebuilder today reported revenues from home sales decreased 64% in the first quarter of 2008 to $953.1 million from $2.6 billion in 2007.

First quarter ended on February 29, net loss was $88.2 million, or $0.56 per diluted share, compared to first quarter net earnings of $68.6 million, or $0.43 per diluted share, in 2007.

Operating loss for the financial services segment was $9.7 million in the first quarter of 2008, compared to operating earnings of $15.9 million last year.

Lennar ((LEN)) stock traded up 23 cents to $17.90 in the morning hours.
Asian Markets Review

In Tokyo Nikkei 225 Index closed lower 102.05 or 0.80% to 12,604.58, in Hong Kong Hang Seng index increased 47.21 or 0.21% closed to 22,664.22. Australia ASX 200 index decreased 9.80 or 0.18% to close 5,371.60. In Malaysia KL Composite index increased 8.61 or 0.69% closed to 1,254.03.

In South Korea Kospi Index decreased 3.43 or 0.20% to close at 1,676.24, in Thailand SET index closed higher 5.39 or 0.66% to 822.96 and Indonesia JSE Index edged increased 10.71 or 0.44% to 2,451.35. Sensex index in India decreased 71.27 or 0.44% to 16,015.56.