Oracle Hates The US Dollar (ORCL)

Oracle Corp. (NASDAQ: ORCL) posted better-than- expected earnings after the close of trading.  It is also going to start paying a dividend.  But where this gets interesting is that Oracle would be doing so much better if it didn’t have to account for the pesky currency changes since the dollar has been so volatile.

The enterprise software giant posted $0.35 non-GAAP EPS and $5.453 billion in revenue.  The estimates from Thomson Reuters (First Call) were $0.32 EPS and $5.45 billion in revenue.  The company’s operating margin was 36%.

But the currency note is where Oracle gets interesting.  The software giant would have posted $0.40 EPS if it were not for the massive strength of the US Dollar.  The currencies even affected the comparable revenue number by a marginal amount.

The company is taking a step that some may cheer and some may not.  It will start paying a $0.20 annualized dividend via a $0.05 quarterly dividend.  We could argue that the company is finally going to start paying income to shareholders.  Some will say that this means that Oracle is deciding to pay out its cash because it isn’t finding companies to acquire.  This actually only represents $1 billion based upon 5 billion shares (rounded down).

Shares are soaring after the results did not come in as cautious as some expected.  Shares traded up almost 3% today and are up another 6% at $16.85 in the after-hours session.

JON C. OGG