Through The Fly's Eyes: SAP

from Theflyonthewall.com












SAP Misses Big

Before the US market closed yesterday, SAP AG (SAP), the German-based software giant, reported a big miss with the stock dropping over $5 in the last hour of trading.

Oracle's (ORCL) revenue also came up soft in its last quarter, but not as soft as SAP's. Advice: stay with Oracle; avoid SAP. Oracle's numbers were better, but more importantly, it appears its strategy of bringing together high-end vertical software applications through acquisition is right on target.

In a September earnings conference call, Ellison all but said good bye to SAP. Ellison said that SAP is at least two years behind Oracle and suggested that if Oracle did not make some big missteps, it would be tough for SAP to catch up. It appears from SAP's results, that Ellison's comments might have some truth to them.

Price weakness in Oracle's stock might be a good buying opportunity. While Oracle reported a weak quarter, it appears the economy and corporate spending are fine. That means spending should pick up for Oracle's products during the year.