Oracle on the state of the economy…

December 23, 2008

It’s no secret that the economy is in the dumps — just days before Xmas, even online sales are slumping. Still, the economic woes take on a whole new meaning when described in a 10Q. Take the 10Q that Oracle (ORCL) filed late yesterday, which included this new, sharply-worded warning:

The recent global economic crisis has caused a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, and extreme volatility in credit, equity and fixed income markets. These macroeconomic developments could negatively affect our business, operating results or financial condition in a number of ways. For example, current or potential customers may be unable to fund software purchases, which could cause them to delay, decrease or cancel purchases of our products and services or to not pay us or to delay paying us for previously purchased products and services. In some financial markets, institutions may decrease or discontinue their purchase of the long-term customer financing contracts that we have traditionally sold on a non-recourse basis. As a result, we may hold more of these contracts ourselves or require more customers to purchase our products and services on a cash basis.

I’ve actually shortened this a bit for the purposes of the post, but it’s worth a read, even if you don’t own shares of Oracle, just because it illustrates exactly how the current crisis impacts every facet of the economy.

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