The Dow Jones Industrial Average (INDEXDJX:.DJI) opened lower on Thursday due to disappointing results, as reported by major technology companies, with Oracle Corporation (NASDAQ:ORCL) and Cisco Systems, Inc. (NASDAQ:CSCO) taking the lead. Oracle was down 9% to $32.65 while Cisco lost nearly about 3% and was last trading at $21.07. The Dow, on the other hand, was down about 60 points or 0.4% to 14451. The Standard & Poor 500 (INDEXSP:.INX) is off 7 points or 0.5% at 1551.
Oracle Corporation (NASDAQ:ORCL)
Oracle was down 9% after it announced disappointing results and a not so encouraging forecast for the coming quarters. Oracle was also among the worst performers on S&P 500 as it missed its earnings estimates. The main reason for its disappointing results are believed to be lackluster demand for its products.
Oracle, however blames its sales team’s performance; CFO Safra Catz expressed his concern on a conference call, saying “What we really saw was the lack of urgency we sometimes see in the sales force, as Q3 deals fall into Q4.” He also reportedly said, “Since we’ve been adding literally thousands of new sales reps around the world, the problem was largely sales execution, especially with the new reps as they ran out of runway in Q3.”
IBM and SAP are giving Oracle a run for its money as the competition in hardware and internet-based software (cloud) spaces continues to heat up. With this in view, Oracle is expected to have a tough time ahead.
Cisco Systems, Inc. (NASDAQ:CSCO)
Cisco also lost ground, in step with a notable analyst downgrade. The stock was downgraded to “Underperform” or the equivalent to sell from “Market Perform” by FBR Capital’s Scott Thompson. Per FBR Capital, Cisco “will become increasingly more challenged to offset weaker-than-expected routing and switching demand as it works to transition to a more software- and service centric business model.”