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).

The Wall Street Journal reports that the former chief executive of Hewlett-Packard (HPQ), Mark Hurd, is in talks with enterprise software maker Oracle (ORCL) about becoming an executive there. Hurd left HP in early August following allegations of sexual harassment by a former contractor. An investigation failed to find any evidence of sexual misconduct by Hurd.

What position Hurd may take up is unknown; Oracle's founder and CEO, Larry Ellison, will not be stepping down from his position, according to people familiar with the matter. Ellison did criticize HP's board for ousting Hurd, telling the New York Times that the board had failed to act in the best interest of its shareholders, employees and customers.

Career Education (CECO) closed at $22.30, selling off 19% in late afternoon trading on Dec. 18 after the Office of Inspector General sent out a negative letter concerning the for-profit education group. CECO January option implied volatility is at 58, above a level of 45 from December 16. April volatility is at 55; above its 26-week average of 43 according to Track Data, suggesting traders purchasing options to hedge price movement.

Three stocks with IV rise on Dec. 18: Sun Microsystems (JAVA) +3%, PowerShares DB US Dollar Index Bullish Fund (UUP) +2%, Walgreen's (NYSE-WAG) +2%, according to IVolatility.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Enterprise software giant Oracle Corporation (ORCL), which finally completed the deal to acquire Sun Microsystems, Inc. (JAVA), is scheduled to discuss its financial results for the second quarter of fiscal 2010 in a conference call Thursday, December 17, at 5:00 PM (ET). You can catch the live webcast of the call on the company's website.

The three months that ended in November saw Oracle deny that its proposed acquisition of Sun Micro would reduce competition and detailed its plans for Sun. Analysts surveyed by Thomson Reuters are looking for Oracle to report that earnings for the quarter rose two cents per share from a year ago to $0.36. Revenue is expected to the same as a year ago, or $5.7 billion.

Sun Microsystems( JAVA) closed at $8.15. European antitrust authorities formally objected to Oracle's (ORCL) proposed purchase of JAVA, reports the Wall Street Journal. The move is expected to delay the deal from closing. ORCL announced in April it was paying $9.50 in cash per share for JAVA. JAVA December option implied volatility is at 47, January is at 48, April is at 34, above its 21-week average of 21, according to Track Data, suggesting larger price movement.

American International Group (AIG) closed at $35.50. Moody's sees AIG repaying government loans. AIG December call option implied volatility is at 77, puts are at 85; below its 26-week average of 108, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

"Oracle (NASDAQ: ORCL) has fattened itself up by swallowing more than 50 companies in the past five years," says Richard Moroney.

In Dow Theory Forecasts, he suggests, "Oracle has proved itself capable of delivering predictable earnings even during tough times by squeezing higher returns out of its assets, including those inherited via $35 billion worth of acquisitions over the past half-decade."

"While some fear the software giant is choking on its latest meal (Sun Microsystems), the deal makes sense operationally.

Memphis-based package delivery giant FedEx Corp. (NYSE: FDX) is generally seen as an indicator of the state of commerce in the U.S. Last week, not only did the Fed's Beige Book report suggest that the economy had stabilized over the summer, with signs of recovery in some districts, But FedEx also boosted its earnings guidance due to stronger-than-expected volume in its international priority-delivery service. So a question going in to FedEx's fiscal first-quarter report this week is whether the company is still a bellwether.

For the three months that ended in August, when FedEx opened distribution hubs in Chicago and Toledo and declared a quarterly dividend, analysts surveyed by Thomson Reuters are looking for it to report that earnings fell 60.2% from a year ago to $0.49 per share. That's also down 23.4% from the previous quarter, as well as less than the recently updated outlook. First quarter revenue is expected to be down 18.3% from a year ago to $8.2 billion.

This week brings a small flurry of end-of-the-calendar-quarter earnings reports. And for the most part, the expectations of the analysts surveyed by Thomson Reuters aren't very high. Companies expected to report declining earnings in the most recently concluded quarter include America's Car-Mart Inc. (NASDAQ: CRMT), Bed Bath & Beyond Inc. (NASDAQ: BBBY), ConAgra Foods Inc. (NYSE: CAG), Jabil Circuit Inc. (NYSE: JBL), Jackson Hewitt Tax Service Inc. (NYSE: JTX), Monsanto Co. (NYSE: MON), and Sonic Corp. (NASDAQ: SONC).

Sun Microsystems (NASDAQ: JAVA) will be acquired by Oracle (NASDAQ: ORCL) for $9.50. JAVA May call option implied volatility of 118 was above its 26-week average of 89, according to Track Data, suggesting larger price movement.

ORCL is recently down 80 cents to $18.20 in pre-open trading. ORCL April option implied volatility of 49 is near its 26-week average of 52, according to Track Data, suggesting non-directional movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

It seemed like a done deal. But in the high-stakes M&A game, things can easily fall to pieces.

Just look at IBM (NYSE: IBM). Over the weekend, the firm withdrew its $7 billion bid for Sun Microsystems (NASDAQ: JAVA). It's yet another heart-breaker for beleaguered Sun shareholders.

Actually, according to the Wall Street Journal [a paid publication], it looks like IBM was the only company interested in a deal. So, even though Sun had little negotiating leverage, it acted as though it had a lot – that is, by holding out for a higher valuation and firmer deal protections (such as "change of control" clauses that provided Sun execs with lush payouts). Well, I guess IBM didn't need Sun that badly or if anything, was certainly willing to play hardball.