Well, JMP Securities analyst Patrick Walravens’s assessment of Oracle’s business these past few months was about as wrong as wrong can be, wasn’t it? In early March, Walravens predicted the company’s February quarter would be an abysmal one. “Our due diligence suggests that the February quarter was, in some respects, the worst Oracle has experienced in over 15 years,” he said. “The tone of the commentary from our industry sources regarding new license revenue is the worst we have ever heard.”

Two weeks later the company posts better-than-expected results for that quarter and announces a dividend–its first ever. So much for Walraven’s worst-quarter-in-15-years prediction.

So what did the analyst have to say for himself in light of Oracle’s report? “It surprised me in almost every way,” he told MarketWatch. “[It] doesn’t square with what you hear from people in the industry.”

Well, it certainly doesn’t square with what we were hearing from you, Patrick…

Well, JMP Securities analyst Patrick Walravens’s assessment of Oracle’s business these past few months was about as wrong as wrong can be, wasn’t it? In early March, Walravens predicted the company’s February quarter would be an abysmal one. “Our due diligence suggests that the February quarter was, in some respects, the worst Oracle has experienced in over 15 years,” he said. “The tone of the commentary from our industry sources regarding new license revenue is the worst we have ever heard.”

Two weeks later the company posts better-than-expected results for that quarter and announces a dividend–its first ever. So much for Walraven’s worst-quarter-in-15-years prediction.

So what did the analyst have to say for himself in light of Oracle’s report? “It surprised me in almost every way,” he told MarketWatch. “[It] doesn’t square with what you hear from people in the industry.”

Well, it certainly doesn’t square with what we were hearing from you, Patrick…

In its second quarter, Oracle managed to hit Wall Street’s earnings targets despite the souring economy. Will it manage to do so again in its third?

That’s not clear. But by some accounts, the company’s third quarter is shaping up to be an ugly one–the company’s worst since the early ’90s. Said JMP Securities analyst Patrick Walravens, “Our due diligence suggests that the February quarter was, in some respects, the worst Oracle has experienced in over 15 years. The tone of the commentary from our industry sources regarding new license revenue is the worst we have ever heard.” And with that, Walravens cut his earnings estimate for Oracle’s fiscal year to $1.37 a share from $1.41 a share.

So companies aren’t clamoring to buy new database software in the worst economic crisis in 50 years. That’s not exactly a surprise. Nor is it surprising that Oracle’s business would suffer for it. That said, it may not be suffering as badly as Walravens claims. Certainly, there are other analysts who don’t quite share his grim view of the company’s prospects. Said Cowen Group analyst Peter Goldmacher, “Oracle is better positioned than its technology peers to weather the downturn given its broad technology solutions and its ability to manage margins.”

Walravens today repeated his Market Outperform rating on the stock, but cut his price target to $15 from $18. He also cut his EPS estimate for the September 2009 fiscal year to 61 cents from 70 cents; for FY 2010 he goes to 83 cents, from 91 cents.

“While we continue to believe that Ariba’s software solutions should fare relatively well in this macroeconomic environment, the services business may not hold up as well as we had previously believed,” he writes. Walravens notes that the company had guided to December quarter services revenue of $32 million to $34 million; roughly 40 percent of that relates to systems implementation. He notes that product upgrades are discretionary “and could easily be delayed by cautious customers.”

Read the rest of this post

“Historically, Salesforce.com has not had an effective knowledge-base solution, giving RightNow a major advantage in business-to-consumer (B2C) sales cycles, which emphasize self-service,” writes Walravens.

Read the rest of this post