Oracle Earnings To Set Tech & IT Enterprise Bias (ORCL)

Oracle Corp. (NASDAQ: ORCL) reports earnings after today’s close, but it is getting the same amount of attention as an ant across the field.  While everyone is focused on R-I-M, this is the stock that enterprise level analysts will use to judge the strength of enterprise business spending for technology and I-T spending ahead.

The First Call estimates for the enterprise software giant are $0.44 EPS on $6.86 Billion in revenues in its year-end quarterly report for Fiscal May 2008.  Estimates for next quarter (the company’s throw away quarter) are $0.27 EPS on $5.47 Billion in revenues (up about $40 million from last week).  For the year ahead, its May-2009 estimates are expected to be $1.50 EPS on $25.79 Billion (up $130 million last week) in estimates.

Average analyst targets are now just north of $25.00, which leaves about 12% upside from today’s analysts target averages.  That gives an implied 17.3 P/E ratio for its trailing 12 months, and it gives an implied forward P/E ratio of 14.6 for the year ahead. 

Options are hard to use with 4 weeks until expiration, but it looks as though options traders are braced for a move of $1.00 to $1.10 in either direction.   Shares are currently in the middle range of the last 5-days, and the stock has used $23.00 as resistance on numerous occasions over the last nine months.

Everyone else is focusing on R-I-M because of the larger trading swings that can be seen, but we think the real tell for overall tech and I-T ahead will come from Larry Ellison’s commentary today.

Jon C. Ogg
June 25, 2008