Earnings Preview : Oracle Corp. (NYSE:ORCL) Q3 2010
Thursday, March 18, 2022 10:23 AM

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(By David) Oracle Corp. (NYSE:ORCL) is set to announce its 3rd quarter fiscal 2010 earnings after the close on Wednesday March 25th 2010.  Despite some decrease in earnings due to the economic recession, Oracle is gaining traction in sales and earnings.  The company claims that it has taken share from close competitor SAP, in every region for the past 4 consecutive quarters.  Oracle is also continuing its transformative acquisition of Sun.

Oracle Corporation is one of the world''s leading suppliers of software for information management. The company develops, manufactures, markets and distributes computer software that helps corporations manage and grow their businesses. The company''s software products can be categorized intotwo broad areas: Systems software and Internet business applications software.

For the second quarter of 2010, Oracle's non-GAAP earnings rose to 1.96 billion dollars or 39 cents per diluted share.  This was compare to analyst expectations of 36 cents per share.  Revenue rose 4% year-over-year  to  $5.9  billion;  non-GAAP  operating  income  rose  9% to  $2.9  billion  and non-GAAP  operating  margin  widened  by  280  basis  points  to  49%.  Favorable foreign exchange movements increased revenue by 5% and net income and EPS by 7% relative to the prior year.  At the end of the quarter, the company had a debt/cap ratio of 35% and $20.8 billion in cash on its balance sheet.  The  Sun  acquisition  is  valued  at  $7.4  billion  in the  aggregate.  The credit agencies give Oracle investment grade "A" level ratings and outlooks are stable.

Earning for the 3rd quarter of 2010 for ORCL, have an average analyst estimate of 38 cents per share.  The high estimate for earnings is 39 cents per share and the low estimate is 37 cents per share.  Full year estimates range from a high of 2.01 per share to a low of 1.78 with an average of 1.89 per share.  The average revenue estimate for the 3rd quarter is 6.36 billion dollars, with a high estimate of 6.54 billion dollars and a low estimate of 5.50 billion dollars.  Over the past 90 days, the average analyst estimate has increased from 36 cents per share to 38 cents per share.  Growth estimate for the current quarter for Oracle is 8.6%, compare to a 10.4% increase for the industry.

ORCL has traded between $14 and $25 over the past year, and has appreciated 47% compared to a 24% increase in the S&P.  However,  ORCL  is  still  considered cheap  compared  to  peers,  with  a  trailing P/E of 17.7 compared to a peer group average of 23.5. The shares also  still  look  good  compared  to  their  five-year  historical  average P/E  range  of  16.3-20.2.  Oracle has a market capitalization of 125.9 billion dollars, a dividend yield of .8% and a profit margin of 44.6%.  ORCL had a 1 year change in its earnings per share of 15% and a 3 year growth rate of EPS of 20%.  The company also has had a 1 year change of sale growth of 4% and a 3 year sales growth rate of 14%.

 

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