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Last night, the nation's second-largest software seller, Oracle (ORCL – 16-5/8), changed its guidance from the rosy report it had issued on February 13. Expected sales for this quarter have not materialized, leaving the company with a projection of earnings per share in the area of 10 cents, which is two cents below estimates.
For some companies, two cents would not make a huge difference. This is where investor expectations come into play. Expectations were so high for ORCL that this news has devastated the share price. ORCL traded as low as 25 percent off last night's closing price after hours and opened down about five points morning.
The announcement has also had a great fallout effect on its major competitor, Siebel Systems (SEBL – 36-3/48), trading down several dollars on the news. SEBL has already reached a new 52-week low this morning, for the second day in a row. Other enterprise software providers may also feel ORCL's pain today.