Stock Picks: AMR Up; ORCL Down

Investors sent shares of AMR (AMR), the parent company of American Airlines, higher after it announced a $2.9 billion financing package to help revamp its hub system operations nationwide. Shares rose as much as 25% in morning trading.

Investors rebooted after Oracle (ORCL) reported weaker than exepcted sales during its traditionally weak fiscal first quarter. Shares dropped more than 3% in morning trading.

The Silicon Valley database software maker said revenue for the quarter ended Aug. 31 dropped about 5% to $5.05 billion, from $5.33 billion a year ago and below Street estimates of $5.2 billion. It earned 30 cents a share, in line with analyst estimates. Earnings rose by a penny a share.

On a Wednesday evening conference call, Oracle President Safra Katz said the company's slow sales were both seasonal and due in part to rival SAP.

"We had slower-than-usual growth in database middleware license revenue in Europe and (Asia Pacific). This is a result of two factors, a very tough year-over-year comparison, and the impact of some of our software company resellers, most notably SAP, who is selling less database because its applications business is down 40%," Katz said. The second quarter is off to a stronger start, Katz said, and that may also see a secular pickup as economic conditions improve.

Some Analysts were also concerned that Oracle's blockbuster merger with Sun Microsystems (JAVA) would be delayed by European regulators, though management was upbeat in its assessment that the deal would close by January.

While Oracle drew praise for keeping costs in line and reducing expenses, Benchmark analyst Brent Williams saw the drop in the company’s database licensing revenue (-22% versus an expected 10% drop) drop as a major issue. "Management attributed this to weakness in Europe and Asia/Pacific and a difficult comparison from the prior year when several large deals closed,” Williams wrote Thursday. “However, our numbers … accounted for the tough comparison, so it’s hard to characterize this performance as other than execution."

Bottom Line: Buy
The stocks’ decline may be a decent opportunity for investors who buy into a global recovery story that will factor in big increases in information technology spending.