HUAWEI, APPLE, COMPUTER SCIENCE CORP AND ORACLE SECOND QUARTER 2009 REPORT - TBR HIGHLIGHTS - Sponsored Whitepaper

Huawei’s 2008 results were impressive by any measure, but particularly so given the weak global
economy during the second half of the year. As operators looked to cut costs while maintaining quality
standards, many turned to Huawei to provide new equipment and services. Huawei’s international expansion in 2009 is being driven, in part, by vendor-linked financing made
available through the company to its customers. The source of the financing is reportedly China’s state
banks, but Huawei has not revealed which banks are the sources.

Apple scores another hit with the iPhone 3GS, introduced in June. Due to subscription accounting, the success of the 3GS was not reflected in Apple’s 2Q09 results, but it does assure future revenue and profits. With an estimated $6.3 billion in operating profit to be recognized over the next eight quarters, the iPhone has become a large part of Apple’s success story. The new 13-inch MacBook Pro was also a hit, driving near-record numbers. Along with the 24-inch iMac introduced in 1Q09, Apple’s new 13-inch MacBook Pro drove unit sales of 2.6 million for the quarter, only 8,000 short of Apple’s 3Q08 record. By lowering prices and increasing product capabilities, Apple was able to reduce its PC operating margin down to an estimated 6.6%; this compares with a corporate figure of 20.1%.

CSC posted its third straight quarter of negative revenue growth in 2Q09 (fiscal 1Q10), in line with its major competitors in the IT services marketplace. Declining demand for major C&SI work contributed heavily to the company’s markedly lower revenue figures. The normally buoyant level of work CSC performs for the U.S. government continued to demonstrate restrained growth, doing little to offset declines in the commercial business. TBR believes CSC has turned its focus to the long-term view, taking steps to improve the company in order to emerge from the economic malaise as a stronger,
better-organized entity.

As the database, services and applications businesses fall off, Oracle’s maintenance business helped drive record operating margins. Oracle drove a strong margin improvement story in 3Q09 as the company’s high-margin
maintenance business increased to 62% of revenue while other segments fell off due to the recession. Oracle contained expenses and cut headcount symmetrically across all three global regions – driven by performance-based headcount efficiency targets.