Shares in database software giant Oracle slumped by more than a fifth in early trading today after the firm issued a profit warning.
Citing the waning US economy, Oracle said its earnings would be a sixth lower than Wall Street estimates, with profits of 10 cents per share.
The market took the news badly, with shares falling from an opening price of $21.375 to $15.719 before rallying to $17.125 at 10.30am New York local time.
According to Oracle chief executive Larry Ellison, a substantial number of customers have cut back on IT spending because of concerns about cooling economic growth.
"Licence growth was strong in the first two months of the third quarter and our internal sales forecast looked good up until the last few days of the quarter," he said. Oracle is expected to announce its third-quarter results on 15 March.
Richard Holway, director of analyst Ovum Holway, told vnunet.com: "This shows the market is finally catching up with reality. Oracle is a great company, but even despite this fall, it is still overrated. We predicted that Nasdaq would bottom out at 2000 points and it is now within one per cent of that."
Earlier this week, 3Com and Gateway also revised their quarterly earnings predictions. 3Com expects to report a pro forma operating loss, excluding charges, non-recurring charges and amortisation of goodwill, of between $235m and $245m, more than double its previous loss estimate of between $80m and $100m.
The company blamed the reductions on a slowdown in the telecoms equipment market, less profit from its high-speed modem business because of sharp drops in prices for cable and DSL modems, as well as other economic factors. The revision came days after 3Com announced that it would reduce its global workforce by 10 per cent.
Gateway estimated it would take charges of between $150m and $275m in the first quarter, which includes a previously announced estimate of $50m for jobs cuts and other items.
The PC vendor also plans to cut 10 per cent of its workforce, and warned that unit sales in the first quarter would be down slightly year-over-year.
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