Oracle Stock Shines Higher Easing Past Estimates

Dec.16.10 | About: Oracle Corporation (ORCL)

Redwood Shores, CA-based Oracle Corporation (NASDAQ:ORCL) is a leader in enterprise software. Larry Ellison has orchestrated major success as captain of the titanic company. Now, with controversial Mark Hurd at the presidential helm, Ellison proved his choice of leader is a good fit early on for Oracle. Since acquiring Sun last year, Oracle continues to generate growth and fend off competitors like IBM (NYSE:IBM). Here’s the earnings breakdown from this afternoon’s quarterly release:

Earnings: Increased by 33% to $.51 per share, or $2.63 billion, compared to $.39 per share, $1.96 billion, in the same period a year ago.

Revenue: Increased 47% to $8.6 billion, compared to $5.87 billion in the prior year.

Actual Versus Wall Street Expectations: Earnings of $.51 cents per share beat expectations by $.05 cents. The consensus analyst earnings expectation was $.46 cents per share. Revenues beat the expected $8.34 billion revenue estimate (Thomson Reuters).

Notable Stats:

  • New software license revenues were up 21% to $2.0 billion.
  • Hardware systems products revenues were $1.1 billion.
  • Oracle’s Board declared a cash dividend of $0.05 per share.

Did You Hear That?

Oracle President, Safra Catz, said:

Our new license growth of 21% demonstrates the strength of the company-specific momentum we are seeing. And our Sun business continues to improve with hardware gross margins increasing to 53%.

Oracle President, Mark Hurd, stated:

That enthusiasm translates into an Exadata pipeline that has now grown to nearly $2 billion. That number is a good leading indicator that customers are planning to increase their investment in Oracle technology.

Commentary: Shares of Oracle have been on a steady uptrend most of the year and also outperformed competitive stocks like IBM, Hewlett-Packard (NYSE:HPQ), Microsoft (NASDAQ:MSFT) and SAP (NYSE:SAP). Currently, Oracle’s share price is well above the 50-day and 200-day moving averages. With another blowout quarter released today, we expect investors and shareholders to cheer the positive numbers with a dose of buying conviction in the near-term.

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Disclosure: No position