Oracle Corp. (NYSE: ORCL) is set to report earnings on Wednesday after the close. 24/7 Wall St. wanted to bring an earnings preview on the matter, but we want to stress that this is likely going to be the most important earnings for the technology sector going into year-end and going into 2014.

What investors need to understand is that the debacle from Cisco Systems, Inc. (NASDAQ: CSCO) brought a serious cloud over many large enterprise technology giants. We would also remind investors that investors try to tie Cisco earnings for a foreshadowing of what is happening at Oracle earnings as well. Now that technology has seen software and hardware converge, this may be more of the case than ever.

Cisco’s stock has been hit hard since it warned that China and other areas have been impacted by the Snowden-NSA scandal and that business really slowed. Other analyst reports and numerous downgrades have tempered expectations for Cisco in 2014 handily. After closing at $24.00 on November 13, the earnings report took Cisco shares down to $21.37 the next day on an unbelievable 243,000,000 shares. Even after a 2% rally on Tuesday, Cisco’s shares were still under $21.10 on last look.

Do you want to know if Oracle and Cisco’s woes are tied? On November 13, Oracle shares were at $35.00. They dropped down to $34.38 the next day, and after trying to post a recovery back above that price they slid and slid. Now shares are down at $33.50.

Larry Ellison probably doesn’t want to be in the same boat (nor on the same yacht as) John Chambers. Unfortunately for him, old ties and correlations by investors are hard to untangle.

Oracle reports earnings on Wednesday after the close. The estimates are $0.67 in earnings per share and $9.19 billion in revenue. That is about 4% expected earnings growth on only 0.9% sales growth. Next quarter estimates are $0.70 in earnings per share and $9.35 billion in sales.

The technology sector has a lot to potentially win or lose here. We have yet to see any major earnings warnings nor any upside projections from the technology leaders since this last earnings season. Year-end is officially two weeks away, and most companies will be having severe employee absences after this week. That means that companies may already know or have a great idea about how their quarterly reports are going to be.

Oracle could be the deciding point for how the large technology sector and enterprise spending stocks will be treated going into 2014. Even as strong as the stock market has been in 2013, Oracle shares were only up about 1.5% versus a gain of about 9% for Cisco for all of 2013. The DJIA was up over 20% and the S&P 500 Index was up over 25% year-to-date.

A last reminder to consider is that Oracle has developed a recent history of disappointing or no longer handily beating its earnings estimates. Hopefully this earnings report will set a good tone for 2014 and help keep the strength going in this bull market.

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