Oracle: Telling Fortunes?
A strong quarter could suggest more success to come for the world's second-largest software company.
Shares of Oracle got a jolt on Friday, jumping 4% after an impressive earnings release. But perhaps more important than a single quarter's results is that many analysts are now seeing signs that the world's second-largest software company is turning a corner.
Selling software to corporations is an ultra-competitive business, and to get a leg up, Oracle set out years ago to become a one-stop shop for customers' needs. The company has not only developed new products itself but also has expanded its portfolio of products by buying other software firms. In particular, it's bought companies with applications software, which complements its bread-and-butter database management software.
It may be a smart strategy on paper, but pulling it off is another matter. The trick for Oracle is integrating its new businesses and persuading customers to get on board with the plan.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
It finally looks like Oracle's efforts may be succeeding, some analysts say. Oracle's most recent quarterly earnings, released on Thursday, showed profits reached 29 cents per share in the fiscal fourth quarter, up 12% from a year ago. Friedman Billings Ramsey analyst David Hilal, who was among the many analysts to weigh in with notes to clients on Friday, was impressed with strong growth across the board. Revenues from database licenses grew 18%, and revenues from application licenses -- a faster-growing field -- increased 83%.
Hilal also said that the company is landing a greater number of licensing deals than a year ago, and that the deals are larger. That suggests customers are embracing Oracle's expanded line of products and services and shows a vote of confidence in the firm's ability to integrate its different pieces, Hilal says. He thinks the stock (symbol ORCL) can reach $17 over the next 12 months, up from Friday's close of $15.
The stock trades at 16 times the 93 cents that analysts expect the company to earn per share in the fiscal year that ends next May.
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
-
Is a Phased Retirement Right for You?
Want to keep working, just not as hard? A phased retirement may just be the answer.
By Kimberly Lankford Published
-
Four Tips to Make Your Sales Presentation a Winner
Being prepared and not being boring can go a long way toward persuading a potential customer to buy into what you’re offering.
By H. Dennis Beaver, Esq. Published
-
Stock Market Today: Markets Rebound Ahead of Big Week for Earnings
Equities rallied on easing geopolitical tensions, upcoming quarterly results.
By Dan Burrows Published
-
Stock Market Today: Nasdaq Spirals as Netflix Nosedives
A big earnings boom for credit card giant American Express helped the Dow notch another win.
By Karee Venema Published
-
Stock Market Today: S&P 500, Nasdaq Extend Losing Streaks
The two indexes have closed lower for five straight sessions.
By Karee Venema Published
-
Stock Market Today: Dow Slips After Travelers' Earnings Miss
The property and casualty insurer posted a bottom-line miss as catastrophe losses spiked.
By Karee Venema Published
-
Stock Market Today: Stocks Stabilize After Powell's Rate-Cut Warning
The main indexes temporarily tumbled after Fed Chair Powell said interest rates could stay higher for longer.
By Karee Venema Published
-
Stock Market Today: Stocks Reverse Lower as Treasury Yields Spike
A good-news-is-bad-news retail sales report lowered rate-cut expectations and caused government bond yields to surge.
By Karee Venema Last updated
-
Stock Market Today: Nasdaq Leads as Magnificent 7 Stocks Rise
Strength in several mega-cap tech and communication services stocks kept the main indexes higher Thursday.
By Karee Venema Published
-
Stock Market Today: Stocks Tumble After a Hot Inflation Print
Equities retreated after inflation data called the Fed's rate-cut plans into question.
By Dan Burrows Published