Kick the chair out from under Oracle

Wednesday, March 26th, 2008

Oracle (ORCL: chart, web, Y!) posted disappointing quarterly software sales today and hinted that its customers had become more cautious, dispelling the notion that the software sector would be immune to the economic turmoil that has roiled the rest of the tech sector.

As I mentioned last weekend, I suspect Oracles report could serve as a template for future earnings reports to come in the next month for the tech sector. In short, profits may continue to climb, but worries about our economic condition and consumer spending will place a target on revenues and sales. If those numbers …

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Walgreens Earnings

Monday, March 24th, 2008

Walgreen’s (WAG: chart, web, Y!) earnings came out today and they ended up beating Street estimates by 2 cents, and second quarter sales increased by 10.5% on comparable-store sales growth of 4.7%.

While the EPS was up, it didn’t match the sales growth, increasing just 6.5%.

So what’s the beef?

Walgreen’s earnings are commendable, but the fact that earnings aren’t out-growing sales leads me to believe margins are tightening. In fact, gross margins were down 14 basis points for a variety of reasons including mix shift and softer seasonal sales.

Expenses were up 11 basis points as a percentage of sales, however most of the expenses …

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