Oracle Beats Street on 23% Higher Net, Shares Up on Sales Guidance

Oracle's fiscal Q4 net income rose 23% to $1.6 billion, or $0.31/share, while adjusted EPS of $0.37 beat analysts' average estimate of $0.35. Sales also exceeded expectations, +20% to $5.83b (vs. $5.6b). Shares of Oracle rose 0.6% to $19.28 in the after-hours, after initially trading to the downside in anticipation of Q1 guidance from its conference call. Oracle forecast adjusted EPS of $0.21, in-line with the Street, as its sales guidance of $4.32b to $4.43b (+18% to +21% y/y) topped estimates of $4.11b. In a press release, CEO Larry Ellison cited a Gartner study showing Oracle's database market share has increased to 47%, compared to a decline to 21% for IBM. President Charles Phillips noted Oracle's application new software license revenues grew 32% in the past year, lauding its strategy of combining innovation and acquisitions, compared to 10% growth for rival SAP, which he said is "... trying to build everything themselves using a 1970s-era proprietary programming language." Oracle lost 1.6% to $19.16 in normal trading.

Sources: Press release, Bloomberg, MarketWatch
Commentary: Analysts Raising Oracle Estimates Ahead of Today's Report • Oracle vs. SAP: A Special Episode Of Law & Order? • Companies With The Most Analyst Attention & Affection • Oracle Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: Oracle Corp. (ORCL). Competitors: SAP AG (SAP), International Business Machines Corp. (IBM), Microsoft Corp. (MSFT). ETFs: iShares Goldman Sachs Software Index Fund (IGV), Software HOLDRS Trust ETF (SWH), PowerShares Dynamic Software (PSJ)

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