Oracle (ORCL) has time and again reiterated its emphasis on profitability. Oracle acquired Sun Microsystems in early 2010 with a view to strengthen its portfolio of products. Sun was a loss-making company at that time, and reported an operating income loss of $2.24 billion for fiscal year ended 2009. This is why Oracle could buy Sun Microsystems at a relatively cheap valuation of $7.4 billion.

However, Oracle seems to have converted the losses incurred by Sun Microsystems to profits. By leveraging Sun's technology, Oracle is trying to come up with a superior product portfolio and maintain an edge over competitors SAP (SAP), Microsoft (MSFT), IBM (IBM) and Hewlett-Packard (HPQ).

Oracle (ORCL) is one of the largest software player in the world, and competes withe SAP (SAP), Microsoft (MSFT) and IBM (IBM) in this market. After acquiring Sun Microsystems in 2010, Oracle became a hardware player as well with products pertaining to enterprise servers and storage hardware business. It competes mainly with IBM and HP (HPQ) in the hardware business.

Here we will analyze the three most important segments for Oracle and the value that each contributes to our $37.94 price estimate for Oracle stock. Our price estimate stands about 20% above market price.

The stock market saw another gainful day despite a reading that consumer sentiment hit a year low. Portugal default fears grew and Japan saw what made for two years of price drops for its consumers. It was pretty impressive to see that most global markets rose on the day. Bond yields were higher and gold failed to reach yesterday's highs.

Here were today's unofficial closing bell levels:

Dow Jones 12,220.59 +50.03 (0.41%)
S&P 500 1,313.80 +4.14 (0.32%)
Nasdaq 2,743.06 +6.64 (0.24%)

Shares of software giant Oracle Corp. (ORCL) traded higher after the market closed Thursday as the company reported fiscal third-quarter earnings above analyst estimates.

Going into this afternoon's earnings report, analysts had been expecting to see Oracle report earnings of 50 cents per share. Excluding one time items, Oracle stated that its quarterly earnings were 54 cents.

If, as outlined in January, you took some profits off the table with enterprise software leader Oracle Corporation (ORCL) (first discussed here on April 7, 2009 at a price of $18.54) you made the correct move: the stock has pulled back slightly, to about $31.

That said, those investors who missed the the April 2009 entry point can take advantage of the recent dip to consider the shares, as it looks like Oracle's is headed to $40 and beyond.

Oracle's FY2011 revenue should surge about 30% to 35%, aided by hardware systems and support sales gains via acquisitions.

Quarterly reports from Oracle (ORCL), Discover (DFS) and Tiffany (TIF) will highlight news on the earnings front this week.

Elsewhere on the economic calendar, the focus will be on housing, with existing home sales data due from the National Association of Realtors on Monday, new home sales numbers from the Census Bureau on Wednesday and data on housing starts released on Thursday.

Also watch for durable goods orders in February and the final GDP for the fourth quarter.

Analyst Upgrades

• Abercrombie & Fitch (ANF) to positive from neutral at Susquehanna.
• tw telecom (TWTC) to outperform from neutral at Cowen.
• Agree Realty (ADC) to buy from neutral at Janney Capital.
• Millicom (MICC) to buy from neutral at Nomura.
• BioMed Realty (BMR) to outperform from market perform at FBR Capital.
• Realty Income (O) to buy from neutral at BofA/Merrill.

The market is getting gently hammered today, but that only presents more opportunities from my perspective.

I am in Ixtapa, Mexico, nearing the conclusion of my first ever week long rest during a 35 year working career ... and counting. In some ways I am hoping to mold my future working environment from seashore to shining seashore -- all around the world -- taking advantage of modern technology. I am thinking of it as "have beach (+Internet), will travel."

Enterprise software leader Oracle (ORCL) which I first wrote about on April 7, 2009, at a price of $18.54, has uptrend in undulating fashion to about $32. Now may be a good time to consider taking some profits if you're in at $19 or below.

However, those investors who can tolerate the risk can maintain their full position with ORCL, but keep in mind the journey to $40 may not be completed in 2011.

Look for Oracle's FY2011 revenue to increase about 30% to 35%, aided by hardware systems and support sales gains via acquisitions.

Red Hat (RHT), an open-source software business whose colleagues include Microsoft (MSFT) and Oracle (ORCL), experienced some selling pressure in yesterday's extended-hours session. The stock was off by 2.7% to $46.60. Still, the company is closer to its 52-week high of $49 than its 52-week low of $26.51.

And if you look at the chart, you'll see that the shares have been in an uptrend following a period of sideways movement. Should an investor buy this uptrend? Is yesterday's selling action a temporary phenomenon?

When it comes to cloud computing, Oracle (ORCL) has been late to the party. After all, even Microsoft (MSFT) has a growing position in the space.

But Oracle appears to be ramping up things. That is, the company has launched Oracle Cloud Office. Based on technology gained from the Sun acquisition, this offering has the full suite of web-based apps for word processing, spreadsheets, presentations and databases.

Analyst Upgrades

• Oracle (ORCL) to outperform from perform at Oppenheimer.
• Accenture (ACN) to buy from hold at Jefferies.
• Advanced Energy (AEIS) and Applied Materials (AMAT) to overweight from equal weight at Barclays.
• Spreadtrum (SPRD) to buy from hold at Auriga.
• Healthcare Realty Trust (HR) and Tortoise Energy Capital (TYY) to outperform from neutral at RW Baird.
• Global Payments (GPN) to equal weight from underweight at Morgan Stanley.
• CBS (CBS) to buy from neutral at BofA/Merrill.
• Sonic (SONC) to outperform from neutral at Cowen.

Share of Oracle Corporation (ORCL) are up sharply in after hours trading following this afternoon's fiscal second quarter earnings report.

As we noted in our earnings preview earlier today, analysts had been expecting to see Oracle report Q2 earnings of $0.46 per share. Actual earnings came in above expectations at $0.51 per share, excluding special items.

Wall Street will be paying close attention to Oracle's (ORCL) second quarter earnings report this afternoon, as it will give some indication as to what to expect from upcoming tech earnings.

Going into this afternoon's earnings report, analysts are expecting to see $0.46 per share, compared with $0.39 during the same period last year.