One thing you’ll not read in anybody mainstream analysis on Oracle’s report…

It’s a listless Friday morning of action out there, with tech leading on a broader soft sell off.   Oracle reported a very strong and impressive quarter last night and the stock is down today.  But one thing you’ll not read in anybody mainstream analysis on Oracle’s report is something that really jumped out at me last night, especially given that weak hardware sales were the reason for today’s disappointment —

Oracle said there more than 1000 Exadata systems already installed around the world and that the company expects to have 3000 Exadata systems installed by the end of 2012, which means they figure on selling another 2000 Exadata hardware systems over the nexrt four quarters.  Such systems easily sell for $1 million or more and 2000*$1mm would mean that Oracle expects to add more than $2 billion to their top line with Exadata growth this year.  With Oracle doing sales in the mid $20 billion range annually right now and expecting 10% growth in the software side of the business means that we’re likely looking for Oracle to grow the topline some 20% or more next year.  Analysts are currently looking for only 8% topline growth for Oracle for next year.   I’m not long Oracle and don’t want to be, but this stock is likely much cheaper vs. forward earnings than most analysts realize.

Micron’s getting killed today too, down some 13% because PC sales are being hit by tablets/smartphones/recession.

We’re slightly down on the day in the portfolio and I’ve not done any trades today.   Back in a bit with a complete run down of my positions.