Oracle: Telling Fortunes?

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.

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.