CIBC Lowers Oracle Estimates

Analyst Melissa Eisenstat says spending concerns and a longer selling cycle are likely to plague the software firm

CIBC World cut its estimates on Oracle (ORCL ) and reduced its price target.

Oracle sees $0.10 Q3 EPS on lower than expected 6% license revenue growth. Analyst Melissa Eisenstat says the Street had a $0.12 estimate. She notes that management cites customers' cautious approach to IT spending over U.S. economy concerns. She thinks the sales cycle for large deals is lengthening. Eisenstat says uncertainty about the U.S. economy is likely to plague Oracle and the software group as whole.

She cut her $12.1 billion fiscal 2001 (May) revenue estimate to $11.2 billion, and cut her $14.7 billion fiscal 2002 estimate to $13.1 billion. Eisenstat also cut the $0.51 fiscal 2001 EPS estimate to $0.45 and reduced the $0.61 fiscal 2002 to $0.52.

Without improved visibility, she thinks it will be hard for Oracle stock to show much appreciation. She slashed the $42 price target to $28.

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