Oracle Earns 64 Cents Per Share

I said in last week’s CWS Market Review that I expected Oracle ($ORCL) to beat earnings, and that’s exactly what happened. After the closing bell, Oracle reported fiscal Q2 earnings of 64 cents per share which was three cents more than Wall Street’s consensus. Sales came in at $9.11 billion which beat Wall Street’s forecast of $9.02 billion.

New software license and subscription sales — a closely watched metric because it’s a predictor of future revenue — gained 17 percent to $2.39 billion. Analysts on average had anticipated $2.24 billion, according to Olson.

Hardware revenue — including servers and storage gained in the 2010 acquisition of Sun Microsystems Inc. — declined 23 percent to $734 million, while Olson said analysts were expecting $810 million.

Oracle is competing with SAP AG (SAP), Microsoft Corp. and a growing number of startups for share of the cloud software market as customers replace aging software and servers with updated, Web-based products.

Since the middle of last decade, Oracle has spent more than $50 billion on more than 80 deals, fueling an expansion in sales and earnings.

Ellison has said Oracle will use cash to boost dividends gradually over time, rather than to make big acquisitions. The company will accelerate dividend payments for its next three quarters, making one payment on Dec. 21 and joining a list of businesses moving up payouts ahead of potential U.S. tax increases next year.

The stock is up to $33.45 after hours. Look for a new 52-week high tomorrow.

Posted by on December 18th, 2012 at 5:52 pm


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