Oracle Mixed Bag As Acquisitions Not In Numbers Yet (ORCL, JAVA)

Larry Ellison and friends over at Oracle Corp. (NASDAQ: ORCL) just reported earnings.  The enterprise software giant posted $0.46 EPS EPS and $6.9 billion in revenues.  Thomson Reuters had estimates pegged at $0.44 EPS and $6.47 billion in revenue. Oracle said that currencies pushed  earnings lower by $0.05 per share.  Today was also a reflection on the acquisition and potential integration of Sun Microsystems Inc. (NASDAQ: JAVA), as well as the virtualization operations of VirtualIron.

Here were some GAAP measures to show some comparisons:

• GAAP new software license revenue was down 13% to $2.7 billion.
• GAAP software license updates and product support revenues was up 8% to $3.1 billion.
• GAAP operating income was down 3% to $2.9 billion, and GAAP operating margin was up 100 basis points to 42%.
• GAAP operating cash flow on a trailing twelve-month basis was $8.3 billion, up 12%.

We did not see formal guidance for the coming quarter but those consensus estimates are $0.30 EPS and $5.15 billion in revenues.

This report also marked its fiscal year end and it had an implied P/E of 14 on a trailing basis as a result on roughly 4.3-times trailing revenues.

Just in case Ellison wants to be bold and go out on a limb, the estimates for the year ahead ending May 2010 are $1.49 EPS and $23.35 billion in revenue.

Oracle shares closed down 0.5% unofficially at $19.87 and the 52-week range is $13.80 to $23.62.  The reaction in the after-hours session showed shares down about another 1% to $19.65 but they are trading above $20.00 in on and off trading.  Until guidance is out and until we have solid data on how the mergers are going, this is just academic at this point.

Jon C. Ogg
June 23, 2009