By Benjamin Pimentel, MarketWatch
SAN FRANCISCO (MarketWatch) -- Oracle shares slipped Wednesday a
day after the software behemoth posted disappointing results, but
shares of Hewlett-Packard rallied as the company geared up for its
annual shareholder meeting.
Oracle (ORCL) was down 0.8% to close at $38.55 after the Redwood
City, Calif.-based tech giant reported weaker-than-expected
earnings, although some analysts also pointed to signs of
improvement in the company's business.
"We continue to believe that while Oracle is seeing secular
pressure in its applications business, concerns about its most
important, and most profitable, business, infrastructure software,
are overblown," J.P. Morgan analyst John DiFucci told clients in a
note.
Wedbush analyst Steve Koenig cited Oracle's better-than-expected
results in its hardware business, telling clients in a note, "This
turnaround looks as if it should be sustainable, at least for the
current product cycle."
But Koenig also pointed to competitive pressures, mainly from
companies offering Web-based software applications, also known as
software-as-a-service, such as Salesforce.com and Workday Inc. on
both Oracle and another major enterprise software company, SAP.
"Although management asserts that the adoption of cloud
computing positions Oracle to switch spots with applications leader
SAP (SAP), we think the reality on the ground is that
software-as-a-service vendors such as Salesforce (CRM) and Workday
(WDAY) are gaining share against both vendors," Koenig wrote.
H-P (HPQ) was up 3.5% to close at $31.62 as the company prepared
to meet with shareholders Wednesday afternoon. The company's
dispute with Autonomy Corp. founder Mike Lynch also came into focus
again after Lynch put out an open letter accusing H-P of misleading
its shareholders.
H-P had acquired the British software company in what has turned
into a controversial 2011 transaction.
H-P had said it found numerous accounting irregularities at
Autonomy before the merger. In an open letter to H-P shareholders,
Lynch said "H-P fully understood Autonomy's accounting methods from
when they took over the company." Lynch said, "The evidence shows
that H-P is not just smearing us, but also misleading you, its
shareholders."
Reacting to Lynch's letter, H-P reaffirmed its allegations
related to the Autonomy deal. "H-P reported those irregularities to
appropriate civil and criminal regulators in the U.S. and U.K.,"
the company statement said. "H-P continues to cooperate in ongoing
investigations by those regulators."
The Nasdaq Composite Index (RIXF) was down 26 points, or 0.6%,
to close at 4,308. The Morgan Stanley High Tech 35 Index (MSH) and
the Philadelphia Semiconductor Index(SOX) were each down a
fraction.
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