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INSTANT VIEW: RIM, Oracle results beat expectations

NEW YORK (Reuters) - Oracle Corp, the business software marker, and Research in Motion Ltd., maker of the Blackberry, posted quarterly earnings above Wall Street expectations, sending shares of both technology companies higher.

Palm Inc. proved the exception on Thursday. Its stock dropped after the company posted a wider loss than analysts had anticipated, as tough competition hurt consumer demand for its smartphones.

COMMENTARY:

RIM

SHAW WU, ANALYST, KAUFMAN BROS

“They beat the numbers handily. They executed against all the odds. It looks like the Motorola Droid is not having as much of an impact as everyone thought and Apple as well. They had a strong quarter and also provided strong guidance. RIM continues to do well.”

Said will be listening for “more color on how they got there -- they clearly did well in terms of the raw performance ... future product directions, that’s one area I will be looking for more help on. One of the weaknesses of the portfolio is their web browser ... that would be key in sustaining growth.

“The email experience is fairly strong. The browser experience is weaker than others. That would help for a few quarters.

“The other thing is with China -- they recently signed an agreement with China Mobile the largest carrier in China -- in terms of color and timing they didn’t really talk about China in the press release a week ago.”

BARRY RICHARDS, ANALYST, PARADIGM CAPITAL

“I think shareholders will be thrilled. These are very good numbers.

“They shipped more than they were expected to, and they activated more new subscribers than they were expected to, so there’s pretty much a clean sweep across the board of better-than-expected numbers.

“The biggest surprise is they bought back $775 million worth of stock.

“The fact that they beat by more than half a million units in shipments in Q3 would seem to imply that they either maintained market share or took market share and that the consumer business was quite good. I mean, they beat by a lot.”

NICK AGOSTINO, ANALYST, RESEARCH CAPITAL CORP.

“Looks good across the board. Every number I’m looking at they beat on expectations, and that’s both on the quarter and on the guidance.

“The Street was clamoring that earnings growth is not there for this story right now, and I think they basically sent the message that that’s not true.

“I would say they’re certainly not losing market share on a global scale.

“My guess is that they probably saw growth in both (enterprise and consumer) areas, and certainly on the consumer side.”

TERO KUITTINEN, ANALYST, MKM PARTNERS LLC

“That’s a major positive surprise because people have been very skeptical about the February quarter. This reflects the fact that they’re executing the transition in the consumer space better than people believed, particularly in Europe.

“People wrote off RIM too soon. They got too mesmerized with Droid.”

ORACLE

KIM CAUGHEY, SENIOR ANALYST, FORT PITT CAPITAL GROUP

“It does tell you that companies are still spending and bought more applications.”

“You can’t really tell from this (if they took share from rival SAP) but you’d guess. Higher revenues lead you to believe they are holding their own at a minimum and maybe taking share.”

TRIP CHOWDHRY, ANALYST, GLOBAL EQUITIES RESEARCH

“The numbers are quite solid. After one and a half years of IT budget cuts and project cancellations, we have reached a point where they (Oracle customers) cannot cut any further.

“It’s still a stock selection market, certain companies will do very well and some less well. But the macrotrend is that you can only cut IT projects so far. If you want to be in position for a post-recession era, you have to start investing IT right now.”

PALM

MATTHEW THORNTON, ANALYST, AVIAN SECURITIES

Said that Palm’s numbers showed weak consumer demand likely due to increasing competition, particularly from devices based on Google Inc’s Android mobile system.

“Palm’s sell through, which reflects sales from carrier customers to subscribers, was disappointing. We thought it would be disappointing and it was even weaker than we expected.

“I think its weaker demand at key carrier partners for the Pre and Pixi. I think its the launch of Android based phones at Sprint from HTC and Samsung.”

LAWRENCE HARRIS, TELECOM ANALYST, CL KING & ASSOCIATES:

“The key issues for Palm are ...the availability of the Pre and the Pixie at carriers beyond Sprint ... and the second issue is that Google with their Android software appears to be gaining traction. Over the next couple of months a longer term issue is how they address this competitor.

“The company has exceeded earnings expectations over the past couple of quarters and certainly Palm’s shares have risen fairly significantly this year.

“(Shares are down because) I’m sure people are focusing on the non-GAAP number came in at a (bigger than expected) loss.

“This is still a company in a turnaround mode ... and they do need to diversify the customer base ... Palm definitely needs to diversify the carrier base and the company is fully aware of this issue and I think they will be addressing this issue in January.”

SHAW WU, ANALYST, KAUFMAN BROS:

“Palm’s quarter was more mixed -- they showed topline and strong units .. the expenses were higher than expected, that’s why the quarter is mixed and the stock is off.

“Palm is at an earlier stage in terms of investment (in smart phone). The positive is they showed pretty strong units however the expenses were higher than expected and hence the loss is larger.”

Reporting by Sinead Carew in New York, Bill Rigby in Seattle, Gina Keating in Los Angeles, and Cameron French in Toronto; Compiled by Paul Thomasch

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